One of Britain’s top technology executives has pushed for microchip company Arm to be listed on the London Stock Exchange instead of selling to the Silicon Valley giant Nvidia, saying a float would protect a key UK asset.

Sir Hossein Yassaie, the founder of Imagination Technologies and an influential Tory donor, said he had raised the company’s $40bn (£29bn) sale with ministers, saying a listing would “rebuild” the UK’s reputation as a home for technology companies.

It comes as Oliver Dowden, the Culture Secretary, considers whether to refer the deal to regulators on national security grounds. The deal already faces an in-depth probe after the Competition and Markets Authority on Friday said it had “significant competition concerns”.

Sir Hossein said Arm’s sale was a concern for both the UK’s “technological sovereignty” and for competition reasons, arguing that Nvidia could cut off competitors’ access to technology which features in billions of chips for smartphones and other devices.

Arm/Nvidia timeline (new)

“The best scenario for Arm… the solution that addresses these issues perfectly, is for Arm to IPO as an independent company, back to where it was,” he said. “There’s no reason why we shouldn’t have companies like Arm and other tech companies on the London Stock Exchange. That was a strength and we began to lose some of that, it is perhaps time to rebuild that as well.”

Arm was delisted in 2016 when Japan’s SoftBank paid £24bn for it, and a flotation had been considered before Nvidia agreed to buy the company.

Arm’s chief executive, Simon Segars, has warned that an IPO could harm British jobs by forcing the company to rein in spending, while Nvidia has insisted that it will maintain Arm’s “open” model for licensing its technology.