RESEARCH TRIANGLE PARK, N.C. – Nortel’s bid to become an even bigger player in the booming Voice over Internet Protocol sector by acquiring rival Avaya apparently has failed.

Both The Wall Street Journal and the North York Times are reporting today that Avaya is most likely to be acquired by private equity groups TPG Group and Silver Lake Partners for around $8 billion.

Avaya apparently has struck a deal for $17 a share – a bid that the Journal said simply was too rich for Nortel to meet.

“After Avaya’s stock price spike in the past week, it became more unaffordable for Nortel,” The WSJ said. Avaya’s stock jumped to $17.18 late Friday from $13.67 a week earlier.

Nortel officials declined comment, according to the newspaper.

Nortel, which employs more than 2,000 people at its RTP campus, apparently had been inn talks with Avaya, a maker of VoIP gear, for about a month. Word leaked recently that Avaya, which is a spinout from Lucent, had put itself up for sale.

The company was an attractive target, given that it is profitable, has a market cap of several billion dollars, and has plenty of cash ($829 million) – not debt.

Nortel should not be ruled out just yet, The WSJ said.

“As in any auction, the situation was fluid and the deal could either break down or veer into the hands of another suitor, such as Nortel Networks Corp,” the paper reported. “It may be some time until the final details are struck, according to people familiar with the matter.”

The Times also refused to count Nortel out.

“The two private equity firms appear to have bested a rival bid from Nortel Networks and a deal may be announced as early as today, those people said,” the NYT said, citing its sources. “But they cautioned that the talks were ongoing and that Nortel could field a higher 11th-hour bid.”

However, the NYT also said integrated Avaya into Nortel posed some problems.

“Some analysts had seen an Avaya-Nortel pairing as a good fit. But the companies’ overlap in product offerings make integration difficult, analysts said,” the paper said.