Wessex Water, the utility company being sold by collapsed energy trader Enron, may be bought for more than £1.2 billion by a consortium including two British banks.
Royal Bank of Scotland and Abbey National, together with GE Capital of the US were reported to have bid over £1.2 billion for the group, said The Business newspaper.
Sale of Wessex is being handled by US investment bank Schroder Salomon Smith Barney, and the paper understands the consortium submitted a revised conditional bid last Friday.
The consortium is believed to be one of three left in the running.
Others are thought to include Hong Kong's Cheung Kong Infrastructure and YTL, the Asian energy group, although it was not known whether YTL had submitted a revised bid.
Italian energy group Enel is understood to have withdrawn.
It is thought Schroders will award exclusivity to one of the bidders shortly with the transaction set to be completed by the end of the month.
Enron bought Wessex Water in 1998 for £1.5 billion. The utility firm provides water supply and sewerage services in Dorset, Somerset, Bristol, Bath, most of Wiltshire and parts of Gloucestershire, Hampshire and Devon.