By Catarina Demony

LONDON (Reuters) - Britain will investigate companies involved in the refurbishment of London's Grenfell Tower with flammable cladding, which have been partly blamed for the devastating 2017 blaze, the government said on Wednesday.

Britain's deadliest residential fire since World War Two ripped through a 23-storey block on June 14, 2017, killing 72 people and causing a national reckoning over the safety and conditions of social housing for those on low incomes.

The investigations could stop seven companies - which include construction contractors and cladding manufacturers - from being awarded public contracts. All seven of the organisations were named in last year's final report into the fire, the government said.

"If certain grounds are met, their names will be added to a published debarment list which must be taken into account by contracting authorities when awarding new contracts," the government said.

The inquiry laid most responsibility for the disaster on the companies involved in the maintenance and refit of the apartment tower, as well as firms that it said had dishonestly marketed combustible cladding materials as safe.

Flames spread uncontrollably mainly because the tower had been covered during a 2016 refurbishment with cladding - exterior panels designed to improve appearance and add insulation - made of flammable aluminium composite material that acted as a source of fuel.

As part of its response to the inquiry's recommendations, the government said it would create a single regulator for the construction industry, and tougher oversight of those responsible for construction products.

A Reuters review of more than 100 buildings showed in January contractors who fitted cladding panels that did not meet fire-safety standards in place when installed had largely escaped financial liability.

The government also said it would give residents stronger legal rights to pressure landlords to act on safety concerns.

Deputy prime minister Angela Rayner said it was important to "reform the system to ensure no community will ever have to face a tragedy like Grenfell ever again".  

(Reporting by Catarina Demony; Editing by William James)