Thank you for your input, however I think you misunderstand the nature of the problem.
By 'Overlapping subnets' I actually mean one subnet that is entirely within another. It is not possible for a subnet to partially overlap another because we are expressing them in CDIR notation, rather than arbitrary ranges. This makes the problem simpler than you allowed for in your analysis.
For example, consider the subnet x.y.0.0/16 There are exactly 2 /17 subnets that might fit inside it (x.y.0.0/17 and x.y.128.0/17) and a greater number of smaller subnets. There might also be larger subnets that contain it, but it is impossible to define a subnet (in CDIR notation) that includes some of the address space covered by x.y.0.0/16, and some address space that is not covered.
You also talk about merging overlapping subnets. This is not what I am trying to do. The end purpose is to produce a reports of all the overlaps which will be used by the network infrastructure people to reconfigure the routers and DNS/DHCP servers so that the subnets no longer overlap.