Patricia Hewitt, the UK secretary of state for trade and industry, has dealt an unexpected blow to William Morrison Supermarkets by referring its bid for rival Safeway to the Competition Commission.

William Morrison, advised by ABN Amro, is the only company to table a bid for Safeway so far, although four other parties have said they are interested in the UK supermarket group. Lehman Brothers said in January in a research note on Safeway that the William Morrison deal was "the most politically acceptable, as well as being the least likely to incur the wrath of the Competition Commission".