Green's bid vehicle, Revival Acquisitions, increased its offer from the £7 billion proposal last week, and also offered to pay a greater part of the sum in cash, as had been expected, although the offer of shares in Revival was also a possibility.
But M&S shareholders had been hoping for a much more substantial offer to tempt them into selling - something nearer £9 billion - and the second bid was rejected on the same grounds as the first.
"At the request of Revival Acquisitions, Paul Myners, chairman, and Stuart Rose, chief executive, met with Philip Green this afternoon," M&S said in a statement. "At that meeting, Revival Acquisitions put forward a revised proposal in relation to a possible offer for the group.
"The board of Marks & Spencer has met to consider the revised proposal and believes that an offer at 370 pence would significantly undervalue the group and its prospects. The board has therefore informed Revival Acquisitions that it does not intend to recommend an offer at this level to shareholders."
M&S has put its faith in the new management team, led by Rose, a former colleague of Green, and the results of his review of the company's business will be published on 12 July, two days before the group's AGM, when he will set out his plan to revitalise the flagging group.
So far there has been little indication of the way the new management is thinking, although there has been growing speculation that some of the more recent changes to the M&S business model - branching out with food- and homeware-only stores, for example - could be reversed.