The Labour party has suggested the Big Four should be broken up on the recommendation of a report it commissioned, as Sky News leaks that the Competition and Markets Authority (CMA) will implement market caps.

The CMA is believed to be introducing market caps on the FTSE 350 in a bid to curb the dominance of the Big Four and to make it easier for the mid-tier to enter this market to a greater extent. Despite looking at a suite of reforms, the CMA will stop short of suggesting a breakup of the Big Four, Sky News has reported.

Labour’s report, which was conducted by University of Sheffield professor of accounting Prem Sikka, calls for the government to go much further than the CMA report will. It calls for the Big Four to be separated into audit and non-audit firms.

The report, as reported by the Financial Times, also proposes capping the Big Four’s share of the market at 50% for the largest listed companies and establishing a state-backed body to audit the accounts of banks and other financial instruments.

The report was commissioned by shadow chancellor John McDonnell following increased public scrutiny of the of the audit profession driven by high profile scandals such as the collapse of Carillion in January and the Financial Reporting Council’s release of its report in to PwC and the collapse of UK retailer British Home Stores in 2016.

The CMA review is due to be released before Christmas and if the leak from Sky News is accurate, it is unlikely that it will suggest reforms as radical as those proposed in Labour’ report.

Over the course of the summer the Big Four and other leading firms held meetings with the Institute of Charted Accountants in England and Wales (ICAEW) to develop a range of proposals to suggest to the CMA as possible ways of increasing competition in the top end of the listed market.

Among these proposals were temporary market caps, shared audits, and an independent audit body responsible for assigning large listed companies with auditors to stop any appearance of conflicts of interest.

The idea of breaking up firms into audit and non-audit practices was unanimously seen as bad option by the firms which responded to the CMA’s initial call for feedback, citing that it would increase audit fees for companies and that the firms rely on the multi-disciplinary nature of their business models.