The City's Takeover Panel is to look at whether Kraft misled workers and investors during its takeover of Cadbury.

The Panel is looking into comments made by Kraft during the takeover battle, in particular relating to Cadbury's Somerdale factory in Keynsham.

Industry analyst, Professor David Bailey from Coventry University's Business School said: "As soon as the ink was dry on the takeover agreement, Kraft executed a swift u-turn and said it would close the plant by 2011 and their actions have already been described as 'shameful' for giving people in Keynsham false hope.

"Keeping open Keynsham was always going to be a very tall order and the post-takeover strategy was always going to be about cost cutting and I couldn't see how that could be done without plant closures

"Given that Kraft had spent so much money on researching the Cadbury takeover, it should have known well that Cadbury had invested tens of millions on the new plant in Poland and that plans for the shift were close to completion. Kraft's promise to protect Keynsham during the takeover battle now seems like a cynical attempt to curry favour with workers, shareholders and the government."

Professor Bailey concluded: "The key outcome from all this should indeed be a new framework to better protect British firms from takeovers so we don't see any more cases like Cadbury.

"Whilst Lord Mandelson's recent comments on the need for reform were very positive, it's a shame that he didn't recognise the need for legislative changes on this front sooner. The fact that he has asked the takeover panel to look at the case is an example of too little too late and I doubt very much whether the outcome will result in anything concrete.

"The evidence base here is overwhelming: most large takeovers fail. We need a new law restoring the public interest test for takeovers alongside changes to the takeover framework and until these are in place; there is nothing to stop another company suffering the same fate as Cadbury."