Kraft is under investigation by regulators over whether it misled Cadbury employees and investors in its battle to take over the confectioner, according to reports.

The US food giant has attracted strong criticism for changing its mind over keeping open a Cadbury factory near Bath, which is now set to close with the loss of hundreds of jobs.

According to reports in the Wall Street Journal, the City’s takeover panel is looking into comments made by Kraft executives during the buyout.

Kraft officials had said in its initial approaches to Cadbury that the Somerdale factory would be kept open, despite the UK firm’s plans to move production to Poland.

But in February the US firm announced that the plant would shut by 2011.