Cable & Wireless' (C&W) £720m take-over of Energis could be scuppered if the Office of Fair Trading (OFT) decides it needs to take a closer look at the deal.

According to reports, there's speculation that C&W might walk away from the deal if the OFT doesn't wave it through as expected later this week.

Yet John Caudwell - the boss of Caudwell Communications who is flogging his telecoms business - wants the OFT to intervene because he believes the merger would be "anti-competitive", reports The Sunday Telegraph.

Caudwell reckons that the tie-up would reduce the number of telcos he can approach for telecoms service, which in turn would make it harder for him to negotiate deals with suppliers.

Energis chairman Archie Norman rubbished the claims adding that if the OFT did get involved it would be a "high water mark in regulatory absurdity".

Analysts at Ovum reckon the UK's telecoms sector is competitive enough and the removal of one player would be unlikely to tip the balance against the likes of Caudwell Communications. ®