[bigiain]

My advice is to be honest. Tell the new offer "I never heard back from you guys, so I accepted another offer. I wouldn't feel right leaving them in the lurch, so it'd a have to be a significantly more interesting offer and I'd need some time to sort things out here without disrupting plans they've made based on hiring me.". There's probably no need to tell your current boss anything until _after_ (if) the "significantly more interesting offer" eventuates.

[azelfrath]

This is the closest to what I intend to do. I wanna display interest without making it obvious that I am gonna push for the best offer from both parties.

[rhizome]

Indeed, the only thing to say to the current company is that you're leaving. Nothing else is their business and will actually hurt you if word gets out. Don't even think about playing them against each other, that only works when you don't work for either of the companies being played (yet).