Ken Livingstone, the mayor of London, said the proposed law could "cause chaos", and warned that, if it were implemented, public transport services could be disrupted and contractors could be entitled to compensation.
A spokesperson for the Metronet consortium, one of the preferred bidders, said: "Our contracts are reviewed every seven-and-a-half years, but we'll just have to wait and see how this affects us."
He added: "I thought it was difficult when Railtrack was privatised but this is unbelievable – there's something new every week."
Livingstone has written to deputy prime minister John Prescott this week to enlist the government's support in urging the European parliament to amend the proposed regulation.
Members of the European parliament will be asked to vote on the regulation in July.