Critics say that the utility watchdogs are not sufficiently accountable to anyone and that under the present regime, too much power rests with individuals.
Ministers are thought to be worried about the public image of the regulatory system after a series of problems this year. The Stock Exchange has complained about alleged leaks of unpublished price-sensitive information into the marketplace and the powerful Public Accounts Committee (PAC) last week launched a review of the entire regulatory process in the water, gas, electricity and telecommunications industries.
The PAC believes that the UK "slipped too easily" into the current regime and that the time has come to examine in detailhow each regulator works.
Professor Stephen Littlechild, head of the electricity watchdog, Offer, has taken the brunt of the criticism this year. In March, he caused chaos in the electricity sector by announcing a review of prices agreed only last year. The announcement wiped billions of pounds from share prices within hours and overshadowed the sale of the Government's remaining stake in National Power and PowerGen.
The Labour Party has repeatedly attacked the regulatory system, saying it needs to be more consistent, transparent and accountable.
Government ministers are determined that the independence of the regulators should be preserved. They have so far resisted calls for change but believe a special Select Committee would show that the regulators are fully accountable to Parliament.
The regulators, including Ian Byatt at Ofwat and Don Cruickshank at Oftel, believe they have made great strides in making the process more transparent. Mr Cruickshank is expected to announce today Oftel's timetable of major tasks up until 1997, starting with the accounting separation of BT's various businesses.