Northern Electric has dropped SG Warburg as its financial adviser and merchant bank under pressure from the Takeover Panel, replacing it with J Henry Schroder Wagg.
The panel believed that neither Warburg nor its new owner, Swiss Bank Corporation, should continue to act as respective advisers to Northern and Trafalgar House, which is expected to renew its bid for the electricity firm.
Trafalgar House declined to comment, but it is thought that Robert Fleming is waiting in the wings in the likelihood that SBC will be dropped.
David Morris, chairman of Northern Electric, said: "Clearly, we feel at a disadvantage at the need to get new advisers up to speed. There is nothing we can do about it."
He said there was continuing concern that Swiss Bank might be able to act in an underwriting capacity in any new bid by Trafalgar, even if it stood down from the advisory role.
Mr Morris said: "They would be very close to the whole process of funding a bid, even if not acting as advisers. The Takeover Panel has yet to fully address these points."
Mr Morris also attacked the industry regulator, Offer, for saying that Northern's offer in February of pounds 500m in shareholder "sweeteners" - made in defence of the original Trafalgar bid - was a main cause of the current review of electricity prices. He said Professor Stephen Littlechild was "inconsistent" in his comments, having earlier assured Northern that it was not guilty of having misled him about the company's financial strength.
Mr Morris said: "I am not prepared to accept that we are a prime cause of the review. To suggest that is a gross distortion of the facts."
The takeover battle is expected to resume after Professor Littlechild announces new price controls next month.
Mr Morris said there had already been a cost of pounds 15m in legal and advisers' fees, compared with earlier estimates of pounds 10m. The company's ability to deliver the package of benefits to shareholders would depend on the outcome of the review. The extent of any payout would be announced when and if the company "reluctantly" accepted any new price controls. He said he did not expect controls would be so onerous that Northern would be forced to reject them and go to the Monopolies and Mergers Commission.
Northern announced a 21 per cent increase in pre-tax profits of pounds 155.8m before the charge for bid costs. The dividend per share is up by 33 per cent to 33p - the most generous payout among the 10 regional companies to have reported so far. Underlying earnings per share are up by 26 per cent to 100.6p.