Theresa May’s attitude to foreign takeovers is about to be tested as the Hong Kong-based billionaire Li Ka-shing and Chinese state power giants plot bids for a significant electricity network.

Electricity North West, which supplies 5m people from Manchester to rural Cumbria, is being sold by US bank JP Morgan and Australian investor Colonial First State for an estimated £2bn.

The auction, which is due to begin later this month, will attract a spectrum of infrastructure investors, with UK pension funds lining up against overseas bidders including Li’s Cheung Kong Infrastructure (CKI) and Spain’s Iberdrola. However, expected interest from State Grid Corporation of China and China Southern Power Grid will pose the biggest challenge to the government.

Several City sources said the two state-owned operators,