The Pensions Regulator has said it appointed new trustees at the former Marconi pension scheme in order to safeguard up to £490m.
Telent is what remains of Marconi, formerly GEC
Investment firm the Pension Corporation has taken over the scheme but there were fears about its plans, and a possible conflict of interest.
The Regulator appointed independent trustees last month to protect the interests of the scheme's members.
The pension scheme is linked to telecom firms Telent, once part of Marconi.
In the wake of the collapse of the former Marconi electronics business, the remnants of the company were renamed as Telent.
On Thursday, the Pension Corporation completed its takeover of the company, which currently employs 2,000 staff, mainly in Chorley, Coventry and London.
When the Pension Corporation launched its £398m takeover bid for Telent in September its stated aim was to gain control of the pension scheme.
The scheme has 62,000 members, mainly deferred or retired, and is currently fully funded with assets of £2.5bn.
As part of its plan, the Pension Corporation intended to sell on the Telent business, but retain the pension scheme and run it with a different investment strategy in order to make profits for the Pension Corporation's own investors.
However the original trustees of the pension scheme, and the Pensions Regulator, feared that the company also wanted to gain control of £490m that had previously been placed in an escrow account.
Escrow accounts are controlled by a neutral third party that will release funds when certain conditions are met.
The one linked to Telent had been created when most of the former Marconi business was sold to Ericsson in 2006.
As part of that deal it was agreed that the money could be drawn on by the pension trustees if the scheme fell into deficit, or it could be given back to the employer if the scheme was deemed to be more than 105% in surplus.
By appointing new trustees, and also appointing itself as the scheme's investment manager, the Pension Corporation had hoped eventually to generate a surplus in the fund which would then enable it to get hold of the money in the escrow account.
"The approach of the Pension Corporation to the scheme created such a fundamental conflict of interest that regulatory action was needed now to protect the scheme and the interests of its members," said the former trustees.
The Pensions Regulator's views on the Telent takeover were published on Friday as part a report from the independent Determinations Panel.
The panel was asked to look at the regulator's decision to appoint independent trustees.
The Regulator, the former trustees and the new independent trustees argued that if they had not taken action then the appointment of other trustees by the Pension Corporation "would not be legitimate".
Their worry was that if the Pension Corporation were able to appoint their own set of trustees then this might damage the assets of the scheme and the interests of its members.
"The approach of the Pension Corporation to the scheme created such a fundamental conflict of interest that regulatory action was needed now to protect the scheme and the interests of its members," they said.
To back up their argument, the panel cited evidence from the Pension Corporation's own literature, statements made on its behalf by senior management, and its actions at other firms where it has staged takeovers to gain control of pension funds.
A spokesman for the Pension Corporation said the situation had moved on since the Regulator took its action.
"We have had constructive dialogue with all parties over the last few weeks and now feel comfortable that issues that were of concern to us can be resolved," he said.
"We will continue the dialogue with the Pensions Regulator to ensure improved understanding of our approach to best practice pension management, the long term probity business model and address any concerns they may have," he added.