The Manchester United ownership saga took a huge twist as it emerged there is serious government concern about Qatari banker Sheikh Jassim bin Hamad al-Thani.

Nearly five months after United was put on the market, bidders remain in the dark over whether the Glazers really want to sell the club. But the news that the Bank of England has flagged up previous regulatory failings at the UK branch of the Qatari Investment Bank headed up by Sheikh Jassim could prove a major turning point.

Sheikh Jassim, a member of the Qatari Royal Family, and Sir Jim Ratcliffe’s Ineos group both made world record bids in the region of £5 billion at the end of the second stage of interest 10 days ago. There was also an offer from US hedge fund Elliott Management, which is seeking to provide cash for an alternative bidder or for the Glazers themselves.

But while Sheikh Jassim, the most likely to meet the Glazer family’s £6 billion valuation, had been seen as the slight front-runner, that could all be changed by the revelation of the issues being raised by senior bovernment officials.

Those reservations are understood to relate to a £1.4 million fine handed out to QIB’s UK unit by the Bank of England in 2016 for violating capital financial rules that left the bank exposed to high levels of risk. Regulators said QIB had “failed to meet some of the most basic regulatory standards”.

QIB claimed at the time to have taken “remedial action” to prevent a recurrence. And although Sheikh Jassim’s bid will see funds diverted through his newly-created Nine Two foundation, rather than via QIB, questions about his previous financial conduct may become a major issue.

Any final bid winner will have to pass the Prem’s newly beefed-up Owners and Directors Test requiring more extensive due diligence by League experts. Representatives for Sheikh Jassim and the DCMS declined to comment but the news adds further intrigue to the sale process, which remains far from clear.

While Sheikh Jassim and Ineos are the two public bidders to take control, and Elliott have gone public on their offer for a “small amount of common equity”, the Glazers’ deal-makers, the US-based Raine Group, have hinted at other genuine suitors.

Bidders have been told to expect an update from Raine in the next two weeks, although there is no fixed timetable. That is adding to the frustrations of the would-be owners, who already feel they have gone through hoops over the past few months.

Sheikh Jassim sent his representatives to Old Trafford last month for a day of discussions, while Sir Jim, Britain’s richest man, headed the Ineos delegation. Both then made “non-indicative bids” by the second deadline, which saw Raine moving the goalposts at the last minute to add even further frustrations.

While Sir Jim is targeting the 69 per cent shareholding held by the Glazers, Sheikh Jassim has made it clear he wants to buy the entire club outright.

But with the Glazers understood to be holding firm on their £6 billion valuation, the prospect of no sale taking place continues to be a genuine concern – especially for the United fans who are desperate for a change of ownership.

It was revealed last month that one serious option for the Glazers was to use the Elliott capital injection to hive off the club’s commercial and merchandising division into a separate company, believing that could be a source of serious long-term revenue growth.

There remains a strong suspicion that the two most active of the siblings, co-chairmen Joel and Avram, are keenest to stay at the club. Ellliott’s offer of a large injection of cash in exchange would allow them to do that and possibly pay off their siblings if they are less inclined to hold onto their share capital.

But until Raine make their intentions clearer – either by announcing a third bidding round or a preferred bidder – lack of clarity will add to the sense of disquiet among the bidding teams. And if the latest development were to significantly impact on Sheikh Jassim viability as a candidate to be affected, the prospect of the sale being shelved could be increasingly serious.

• The Sun report