The fightback, in which the Co-op is threatening to bar any of Mr Regan's backers from its lucrative pounds 3.5bn investment business, aims to halt a damaging destabilisation of the Co-op's affairs.
It also comes as the Stock Exchange continues a major inquiry into the tenfold rise in the shares of Lanica Trust, his quoted vehicle, since October and the leak of his "plans" six weeks ago.
Shares in Lanica, a shell company, have been suspended at pounds 19.50 since at the Exchange's insistence as its patience with the speculative bubble final ran out.
Through the media, Mr Regan has attempted to appeal to Co-op members directly with the aim of prising loose its non-food businesses, including the Co-op Bank.
Cynics say the hype is as likely to be aimed at diverting attention from the inquiry as it is to be a serious takeover bid.
No formal proposal for his ambitions, which run anywhere from pounds 500m to pounds 8bn, has yet been tabled - or is ever likely to be, the Co-op says.
Co-operative Wholesale Society chairman Graham Melmoth has now written to Lord Hambro, chairman of Lanica's merchant bank Hambros, and to Schroders, one of its known institutional backers, to demand where their loyalties lie.
At stake is pounds 2bn of income annually from the Co-op Insurance Society, which may be invested through the banks' fund management arms and other institutions.
Warning letters have also been sent to Lloyds TSB and Mercury Asset Management. Both have both been linked to Mr Regan in press leaks. MAM manages the largest slice of CWS' pounds 1.5bn pension fund after a 25- year relationship with the Co-op.
"The CWS would view Lloyds/TSB as acting in a manner hostile to our interests on a project that has no prospect of success," Mr Melmoth wrote last week to the bank's chairman, Sir Brian Pitman.
The Co-op is being advised by SBC Warburg banker Brian Keelan and City lawyers Linklaters and Paines. The counter-attack has drawn quick denials all round.
Lloyds TSB sources say they have no intention of leading bank funding for a bid. MAM chairman Hugh Stephenson meanwhile has replied to say that it is neither an investor in Lanica nor a backer of Galileo, the special purpose vehicle for Mr Regan's ambitions. "We were approached by Lanica with a view to supporting their bid and declined to do so," Mr Stephenson wrote. MAM denies Lanica's assertions that it was the source of the original leak.
Mr Melmoth is understood to be doubly furious that uncritical press reports have given Mr Regan unwarranted credibility.
According to its last accounts, Guernsey-based Lanica had net assets of just pounds 2.9m. Some 65 per cent of its shares are owned by finance director David Lyons and tax haven companies in the West Indies, British Virgin Islands and Monaco.
Mr Regan shares directorships of the companies with Michael Charlton, a Monaco-based broker, and four other Monaco investors - Antoine Awad, Chiew-Siew Lee, David Sinclair and David Banfield - about whom little is known.
Galileo meanwhile is backed by Lanica, Schroders, Jupiter, brokers Killik & Co and controversial Tory MP David Evans.
Neither Lanica, its brokers HSBC James Capel nor the Stock Exchange would elaborate on the inquiry into dealings in the trust's shares. "We're still in discussion with the company over several aspects relating to its affairs," an exchange source said.Reuse content