Residents affected by the blaze have been told senior figures from Kensington and Chelsea Council and the Kensington and Chelsea Tenant Management Organisation will face formal police interviews.
The news was cautiously welcomed by campaigners who urged the Metropolitan Police to also consider gross negligence manslaughter charges against individuals.
In a letter updating residents on the criminal investigation, the force said: “We have seized a huge amount of material and taken a large number of witness statements.
“After an initial assessment of that information, the officer leading the investigation has today notified Royal Borough of Kensington and Chelsea and the Kensington and Chelsea Tenant Management Organisation that there are reasonable grounds to suspect that each organisation may have committed the offence of corporate manslaughter under the Corporate Manslaughter and Corporate Homicide Act 2007.
The Justice 4 Grenfell campaign group said it hoped the statement was a “precursor” to individual arrests, adding: “Any arrests made will be seen by all those affected as tangible evidence that they are valued members of society and are being listened to.”
Police do not have the power to arrest individuals under the offence of corporate manslaughter, but someone can face gross negligence manslaughter charges if a death may have been caused by an act or omission on their part.
Tottenham MP David Lammy said he was “pleased” justice for those affected was “being taken seriously”, but pointed out the maximum sentence for corporate manslaughter is a fine.
He said: “A fine would not represent justice for the Grenfell victims and their families.
“Gross negligence manslaughter carries a punishment of prison time, and I hope that the police and the CPS are considering charges of manslaughter caused by gross negligence.”
Yvette Williams, a co-ordinator for Justice 4 Grenfell, said: “We welcome that there is enough information and evidence to go down the corporate prosecution route for the Tenant Management Organisation and Royal Borough of Kensington and Chelsea.
“However, what we would like to see running alongside that is individuals being prosecuted.
“We want is individuals named and prosecuted - you can have both, but we don’t want corporate manslaughter on its own.
“People implement policy, people make decisions, people took particular actions and those people are responsible.”
The Metropolitan Police said the letter was “simply an update on the investigation so far” and “should not be taken to conclude that the identified offences and organisations are the only offences, organisations or individuals that are being investigated”.
Joe Delany, who lives in a block adjoining the tower and has worked with the Grenfell Action Group, said: “I think everyone has more cautious scepticism than cautious optimism.
“It’s one thing to announce this investigation is going on - which is totally different from a prosecution being brought, which is completely different to a conviction being achieved.”
At least 80 people were killed when the blaze ripped through the 24-storey block of flats in west London on June 14.
Kensington and Chelsea Council leader Nicholas Paget-Brown and his deputy Rock Feilding-Mellen resigned amid fierce criticism of the council’s response to the disaster.
Robert Black, chief executive of Kensington and Chelsea Tenant Management Organisation, which manages Grenfell Tower, also stepped down so he could “concentrate on assisting with the investigation and inquiry”.
Responding to the Scotland Yard announcement, newly-elected council leader Elizabeth Campbell said: “Our residents deserve answers about the Grenfell Tower fire and the police investigation will provide these.
“We fully support the Metropolitan Police investigation and we will co-operate in every way we can.
“It would not be appropriate to comment further on matters subject to the police investigation.”
The Metropolitan Police said it was a “complex and far reaching investigation that by its very nature will take a considerable time to complete”.
It added: “The Met has made a commitment to the families who lost loved ones in the fire and survivors that they will be kept updated, as far as we possibly can, as the investigation continues.
“As is routine, we will not give a running commentary on this investigation.”