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Once offer is signed is the earliest you should say anything. You don’t have any kind of agreement until you sign and send the offer back. More conservative people would say wait until the background check clears.
I used to work in recruiting and can tell you that counter offers are for suckers. If you got an offer that is at least good enough to leave for, then you can go in and ask for a pay raise (without disclosing the offer) and see if they respect you enough to give it to you. If they give you the raise you want and you end up staying, no one will feel like it was a hostage situation and you may even earn some respect points for having the guts to do that. If they say no to your request, then it is up to you to either disclose the offer and take a second swing at the raise negotiations or you could just give notice on the spot and take the other job. Just make sure that you are 100% willing to take the other position before you make a move.
EY - you wouldn’t want to discuss the open offer in case they make a counteroffer that you can’t refuse before signing?