The withdrawal of Resolution from the Bradford & Bingley capital-raising talks is a blow to the credibility of the bank's board and chairman Rod Kent.

Resolution's proposal appeared to tick most of the boxes and certainly looked superior to the agreed deal with the private equity group TPG.

It raised fresh capital at a lower cost for B&B. It ensured the pre-emption rights of existing shareholders were preserved through a 100 per cent clawback. It provided strategic direction for B&B. It even addressed some of the concern about Resolution taking control - by capping its voting rights at 29.9 per cent.

B&B's decision to refuse Resolution access to its books looks curious. Its explanation that there were doubts about the funding is bizarre given that it had the approval of four of the UK's biggest institutional shareholders.

It is possible that tactics and brinkmanship scuppered the talks. Possibly B&B, advised by Goldman Sachs, was hoping that Resolution would sweeten its terms when faced with a firm “No”.

Instead it has called B&B's bluff and walked away. If this is the case, a deal might still just about be salvaged.

The other explanation is that due diligence would have revealed problems that would have sent Resolution into retreat anyway. If that is the case, shareholders deserve to be told what they are.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive