Asian billionaire Li Ka-shing has put in the top bid for Wessex Water, the British utility put up for sale by bankrupt US energy group Enron.

Li's offshoot, Cheung Kong Infrastructure, itself a part of Hutchison Whampoa, the Hong Kong-based telecoms and ports conglomerate, has bid about £1 billion. But its chances of acquiring Wessex may be hampered by an investigation by Ofwat, the British water regulator. Industry sources say Ofwat's director-general, Philip Fletcher, is concerned that the bid must be seen to be 'squeaky clean' to satisfy politicians who could complain that Ka-shing's worldwide operations are not sufficiently transparent.

The four bids for Wessex, include offers from Italian utility Enel, Malaysian energy group YTL, and a UK financial buyer. All are thought to be close in price, although Ka-shing is in front.

The auction may not ultimately depend on hard cash, but on Fletcher, attuned to the sensitivity of water takeovers in the UK.

Hutchison Whampoa, the flagship of Ka-shing's empire, owns Felixstowe port, Suffolk.

Schroder Salomon Smith Barney, the US investment bank, is handling the Wessex sale. A preferred bidder is expected to be chosen within five or six weeks. If Ka-shing's bid fails, the field may be clear for the Italians, who last year considered a bid for Southern Water.

Enron bought Wessex in 1998 for £1.36bn, but the stock market value of water companies has since fallen.

Financial institutions have expressed a growing interest in refinancing UK water companies using debt.

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