Two of the biggest companies in Sussex could be up for sale.

Gordon Laidlaw, spokesman for Scottish Power, the parent company of Worthing-based Southern Water, said: "It is true to say we are looking at ways of releasing capital by refinancing or selling Southern Water."

Pat Hemlap, public relations manager with American Electric Power (AEP), owner of Crawley-based Seeboard said: "If one of our assets is worth more to somebody else than it is to us, we would naturally consider selling."

There have been rumours surrounding the future of both utilities for several months.

Seeboard is thought to be worth about £1.3 billion.

AEP became owner when it bought fellow US electricity company Central and South West (CSW) earlier this year.

CSW paid £1.6 billion for Seeboard in 1996.

Electricite de France, (EdF) the French state-owned electricity group, is favourite to buy the Crawley-based company which supplies more than two million customers.

EdF already supplies power to three million British customers, through its ownership of London Electricity and SWEB, the supplier based in the South-West.

The acquisition of Seeboard would depend on the price and on EdF's ability to buy without being accused of having a dominant position in the British market.

The Government has recently expressed concern at slow progress in opening continental energy markets to competition, particularly in France, while continental companies have been free to buy British utilities.

Ministers, however, have not attempted to block cross-border takeovers which are the responsibility of European Union competition authorities.

Scottish and Southern, which owns Southern Electric, is also thought to be a potential bidder for Seeboard.

Mr Hemlap said: "We have seen the stories that have popped up in the last couple of months in the UK press but we have a long-standing policy of not commenting on that sort of rumour or speculation. As far as we are concerned it is business as usual.

"On a day-to-day basis, we evaluate our assets to determine how they fit with our strategy of moving the business forward.

"But, as far as the speculation surrounding Seeboard goes, we have a consistent policy of not making any comment."

Seeboard supplies electricity and gas to homes and businesses across the county.

The company employs 3,700 workers.

Southern Water has a workforce of 2,300. Its area covers Sussex, Hampshire, Kent and the Isle of Wight.

It is also seen as a target for a number of possible buyers.

Top of the list is a joint approach by Centrica and Vivendi, with another bid being considered by Italian utility Enel.

The latest company to appear on the scene is the bank WestLB Panmure.

Utilities expert Paul Garrett, who is based in Brighton, said the potential Centrica-Vivendi bid was believed to be supported by Schroder Salomon Smith Barney.

He said: "The acquisition of Southern Water would provide it with the opportunity of adding water to the gas, electricity and telephone services it already supplies to homes and businesses.

"Scottish Power is known to be looking to end its multi-utility status to focus on its international energy operations."