Clifford Chance (CC) and Latham & Watkins are among a number of law firms understood to be advising on the restructuring of Dubai World – the state-owned conglomerate responsible for some of the Middle East's most high- profile projects.

The Dubai state yesterday (25 November) asked creditors of Dubai World for a six-month debt standstill on the company's liabilities in a move that caught credit markets by surprise.

According to wider press reports the company has been trying to pay off around $60bn (£36.3bn) in debt while Deloitte has been appointed to oversee a potential restructuring of the group.

If approval is gained from the creditors then the repayment of a $4bn (£2.4bn) bond issued by Dubai World subsidiary Nakheel will be delayed until the end of next May.

Long-time Dubai World adviser CC is acting for the company, fielding a team including Dubai-based corporate partner Simon Clinton and restructuring partner Robin Abraham.

Separately, it is thought that Latham has been advising the Dubai authorities on matters relating to the standstill with a team headed up by office head Bryant Edwards.

Allen & Overy has been cited as likely counsel to some of Dubai World's senior lenders. One group of bondholders was expected to discuss engaging legal advisers today. All three firms declined to comment.

Developments over Dubai's debt will be watched closely by international investors and restructuring advisers. In addition, the episode has been held up in some quarters as undermining Dubai's status as a business centre, a reputation that has seen dozens of law firms flock to the region in recent years. Dubai World has until recently been expected to meet its debt obligations.

One restructuring lawyer at a leading UK practice commented: "It is interesting that they are looking at protecting the image of Dubai and they go and announce this as the markets shut for [the public holiday] Eid. From a PR point of view, it just looks awful."