But while the UK regulator's decision to take such an unexpectedly aggressive stance spells bad news for BAA, it's likely to have the opposite impact on City law firms.

In fact, regular advisers Freshfields Bruckhaus Deringer and Herbert Smith must feel like they have been upgraded to first class, given the publicity their mandates for BAA have received over the last week alone. Granted Freshfields' role advising on BAA's epic £13bn refinancing has been somewhat overshadowed by events at the Competition Commission but, after fielding a large team on the deal virtually since its client Ferrovial bought BAA for some £10.3bn in 2006, the firm is unlikely to care.

Similarly, Herbert Smith has been advising the company on competition matters ever since the Commission first began its investigation more than a year ago. With the proposals going further than expected and pushing for the sale of two of the three London airports, Herbert Smith looks likely to be heavily involved for the foreseeable future. BAA is bound to challenge the Commission's formal report after it is published in April.

But while neither will be short of fees from BAA, for one of the two firms it is very unlikely that everything will turn out so well in the long term - as only one can win the key mandate advising BAA on the multibillion-pound airport sales.

Given the extensive knowledge that both firms now have of BAA, it may mean that the firm losing the sell-side mandate will also be left unable to take on an instruction from any bidder - unless it is able to secure a waiver from BAA. Freshfields looks to be in the stronger position for the divestment role as it advised on both the initial acquisition of BAA by Ferrovial and on subsequent deals, including its sale of World Duty Free Europe.

But Herbert Smith may not be the only one to be placed in a potentially precarious position. Linklaters hired Competition Commission panel member Laura Carstensen - who has played a role in the BAA investigation - as a consultant earlier this year so, at the very least, it will likely have to ring-fence her from work for any future bidders. As one leading competition expert put it: "To the extent people want to buy any of the airports, I would have thought Linklaters would not be able to act for any acquirers or indeed any of the lenders."

Potential conflict issues could go further still as several firms are likely to have had some involvement for clients making Competition Commission submissions pushing for BAA's airport monopoly to be broken up. Wishful thinkers aside though, few think it will ultimately leave big firms unable to act for bidders. However, given that high-profile names such as Dubai International Capital, Manchester Airport Group and Hochtief - which have used firms such as Linklaters, Freshfields, Addleshaw Goddard and Taylor Wessing - are already being linked to Gatwick, it is certainly an issue.

Perhaps it is lucky then that many UK clients still take a far more generous approach to conflicts than their US counterparts.

So despite the conflicts issues, it is more than likely that most firms will find themselves with a waiver from their client leaving them clear to act.

But while the UK regulator's decision to take such an unexpectedly aggressive stance spells bad news for BAA, it's likely to have the opposite impact on City law firms.

In fact, regular advisers Freshfields Bruckhaus Deringer and Herbert Smith must feel like they have been upgraded to first class, given the publicity their mandates for BAA have received over the last week alone. Granted Freshfields' role advising on BAA's epic £13bn refinancing has been somewhat overshadowed by events at the Competition Commission but, after fielding a large team on the deal virtually since its client Ferrovial bought BAA for some £10.3bn in 2006, the firm is unlikely to care.

Similarly, Herbert Smith has been advising the company on competition matters ever since the Commission first began its investigation more than a year ago. With the proposals going further than expected and pushing for the sale of two of the three London airports, Herbert Smith looks likely to be heavily involved for the foreseeable future. BAA is bound to challenge the Commission's formal report after it is published in April.

But while neither will be short of fees from BAA, for one of the two firms it is very unlikely that everything will turn out so well in the long term - as only one can win the key mandate advising BAA on the multibillion-pound airport sales.

Given the extensive knowledge that both firms now have of BAA, it may mean that the firm losing the sell-side mandate will also be left unable to take on an instruction from any bidder - unless it is able to secure a waiver from BAA. Freshfields looks to be in the stronger position for the divestment role as it advised on both the initial acquisition of BAA by Ferrovial and on subsequent deals, including its sale of World Duty Free Europe.

But Herbert Smith may not be the only one to be placed in a potentially precarious position. Linklaters hired Competition Commission panel member Laura Carstensen - who has played a role in the BAA investigation - as a consultant earlier this year so, at the very least, it will likely have to ring-fence her from work for any future bidders. As one leading competition expert put it: "To the extent people want to buy any of the airports, I would have thought Linklaters would not be able to act for any acquirers or indeed any of the lenders."

Potential conflict issues could go further still as several firms are likely to have had some involvement for clients making Competition Commission submissions pushing for BAA's airport monopoly to be broken up. Wishful thinkers aside though, few think it will ultimately leave big firms unable to act for bidders. However, given that high-profile names such as Dubai International Capital, Manchester Airport Group and Hochtief - which have used firms such as Linklaters, Freshfields, Addleshaw Goddard and Taylor Wessing - are already being linked to Gatwick, it is certainly an issue.

Perhaps it is lucky then that many UK clients still take a far more generous approach to conflicts than their US counterparts.

So despite the conflicts issues, it is more than likely that most firms will find themselves with a waiver from their client leaving them clear to act.