The decision means that the court hearing scheduled for next week is likely to be adjourned. Mr Regan's lawyers do not expect a hearing until September.
The intervention of the CPS could also mean that Mr Regan's advisers, which include Hambros Bank and Travers Smith Braithwaite, could be dragged further into the affair with senior figures expected to be subpoenaed.
The CPS said it had referred the case to Greater Manchester Police who had been asked to conduct an investigation into alleged criminal activity. The CPS will then make a decision on whether or not to proceed with the case against Mr Regan, his business partner David Lyons and the former head of CWS retailing, Allan Green.
Both the Co-op and the Regan camp said they had asked the CPS to take on the case. The CWS said: "The seriousness of this situation has been recognised by the appropriate authorities, who have now taken responsibility for the matter."
Mr Regan's lawyer, Ian Burton of Burton Copeland, expressed similar satisfaction: "It is exactly what we wanted. It puts the whole prosecution on a level playing field. But I would be very surprised if they proceed."
If the CPS does proceed it is expected that senior figures at Mr Regan's advisers will be brought in as defendants in the case. These could include Sir Chips Keswick, chief executive of Hambros Bank which reached a financial settlement with the CWS over its role in the failed pounds 1.2bn bid.
Mr Burton said Mr Regan was very happy to co-operate with the police. It is understood that he will make his files available to the police for inspection. This will include correspondence from the legal, professional and financial advisers who acted on his behalf in the bid.Reuse content