The fund, believed to be the biggest single loser in Bernard Madoff's alleged $50bn "Ponzi" scheme is considering suing PwC, its own accountants, for failing to detect the fraud, as victims start looking for deep-pocketed sources of compensation for their losses.

Fairfield Greenwich, whose clients stand to lose $7.5bn invested with Bernard L Madoff Investment Securities, is considering the action after an auditor was named in a case brought by another victim.

Mr Madoff was on Wednesday ordered to submit to electronic monitoring and given an overnight curfew in his Manhattan apartment. His wife was ordered to surrender her passport.

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With three of the four biggest accountancy firms - PwC, KPMG and Ernst & Young - auditing the Madoff feeder funds, lawyers say the asset-rich firms are likely to be targeted for legal action.

Madoff Securities was audited by a tiny operation in Rockland County, New York, with only three employees, making it an unlikely potential source of compensation for victims.

The New York Law School this week named BDO Seidman, part of BDO International, the fifth-biggest auditor, in its legal action against Ezra Merkin and his Ascot Partners fund, which invested its money with Madoff. Ascot was audited by BDO.

BDO said it did not audit Madoff Securities, and its "audits of Ascot Partners conformed to all professional standards and we will vigorously defend ourselves against these unfounded allegations".

PwC, Fairfield and Ernst & Young declined to comment. KPMG said "our work conformed with all professional standards".