JUSTICE Secretary Kenny MacAskill is to meet with Edinburgh's taxi and private hire drivers to discuss fears about Glasgow-based rivals trying to buy into the Capital.
There are fears some Glasgow businessmen looking to move into the city's private hire trade may have links with criminal gangs.
Several Edinburgh private hire operators say they have had lucrative offers to sell up their businesses in recent months.
One senior figure in the Edinburgh taxi trade said: "We are concerned about our business but people should be worried about the drugs, violence and money laundering that comes with some of the people looking to come here."
Police raised fears last month that west coast gangsters want to infiltrate the Capital's private hire car firms, tanning salons, security businesses and the sex industry as "fronts" for drug dealing and money laundering.
Mr MacAskill, the MSP for Edinburgh East and Musselburgh, will meet representatives of the Scottish Taxi Federation and the city's taxi and private hire firms to discuss their concerns.
Unlike black cabs, there are no restrictions on the prices private hire operators can charge. The existing operators are worried their west-coast rivals will start a price war with a view to driving them out of business.
Bill McIntosh, secretary of the Scottish Taxi Federation, said: "Some members have concerns about the situation in Edinburgh and we hope to raise these with the minister.
"You have to remember there are no restrictions on private hire licences as long as they meet the police checks.
"So anyone is perfectly entitled to apply for as many licences as they want."
Councillor Colin Keir, convener of the city council's regulatory committee, said he welcomed the Justice Secretary's meeting with the taxi and private hire trade.
"Because private hire is de-regulated, much of the movement within the trade is just down to commercial decisions taken by the individual organisations, which we don't have any bearing over."
Two weeks ago, police told of their fears that some of Glasgow's most notorious gangsters were attempting to expand their crime empire into the Capital - among them associates of millionaire gangland boss, Tam McGraw, known as "The Licensee".
Officers fear organised criminals could use the taxi trade to help mask illegal activities, including drug dealing, in the Capital.
Mr MacAskill is understood to have discussed the issue with Lothian and Borders chief constable David Strang and Graeme Pearson, head of the Scottish Crime and Drug Enforcement Agency.
McGraw, 55, is rumoured to be worth more than 20 million, having earned his nickname after establishing himself in Glasgow's pub trade.