Canary Wharf Group, the Docklands property owner, is considering legal action against its founder and company director, Paul Reichmann, over a £2bn new development.
It has emerged that Mr Reichmann, through his personal investment vehicle IPC Advisors, is bidding against Canary Wharf for a giant new scheme immediately east of the Docklands development.
British Waterways, the owner of the site known as Wood Wharf, is holding a competition to pick a developer for the scheme. The bidders were told at the end of last week which parties they were up against.
The Canary Wharf management was shocked to find out that IPC Advisors was among the 10 short-listed developers. Other contenders include Hammerson, British Land, Stanhope and the Duke of Westminster's property company, Grosvenor Estates.
Mr Reichmann conceived and built the Canary Wharf estate, which provides more than 14 million sq ft of office and retail space in east London.
He was executive chairman until last year when bids were received for the company. He responded by trying to put together his own offer for the company. He first "stepped aside" from his duties as chairman before relinquishing the post altogether in November.
But he has remained a company director throughout and still sits on the board. He would have known about Canary Wharf's interest in the Wood Wharf development.
Mr Reichmann failed to raise the money needed for a bid for Canary Wharf, although he has backed one of the two bidders that have now put their final offers to shareholders.
Canary Wharf declined to comment on the Wood Wharf situation. However, it is understood that it is consulting its lawyers about what it can do about Mr Reichmann's dual role of director and competitor. Mr Reichmann's spokesman did not return calls.