Resolution’s bid to lead a £400 million rescue financing for Bradford & Bingley collapsed in acrimony yesterday with the mortgage bank forced to deny accusations that it sabotaged a deal supported by major shareholders.

Calls for Rod Kent, the B&B chairman, to step down as a result of the botched bailout began to grow among disgruntled investors, who will now probably have to vote for an alternative capital injection from TPG, the American buyout firm. “I think shareholders should vote through the TPG alternative and then sack the entire board,” one irate shareholder said.

Standard Life, B&B’s biggest shareholder and an advocate of Resolution, took the rare step of going public with its views. Guy Jubb, the head of corporate governance for Standard Life Investments, said: “We are very disappointed by today’s developments. We firmly believe that it would have been in the best long-term interests of Bradford & Bingley’s shareholders for its board to have enabled Resolution’s proposals to progress.”

Mr Jubb added: “Many other investors, large and small, will share the substance of our views. It is concerning that the Bradford & Bingley board have not been more responsive to the views of their existing shareholders.”

Standard Life, one of four of B&B’s top ten shareholders who supported Resolution, holds a 5.3 per cent stake. B&B shares lost more than a fifth of their value, closing 21 per cent down at 63¼p, as Resolution walked away, blaming Mr Kent and his advisers at Goldman Sachs.

“The entrenched position of the board of B&B has prevented the constructive engagement necessary to finalise this proposal,” Resolution said.

Resolution, set up by the entrepreneur Clive Cowdery, had secured the backing of Standard Life, Insight, Prudential and Legal & General, which would have subscribed to a £400 million placement of new B&B shares at 72p. Although they would have owned 55 per cent of the company, the parties had pledged to cap their voting rights at 29.9 per cent.

B&B had rejected this proposal in favour of a £179 million cash injection from TPG in exchange for a 23 per cent stake. It also drew up plans for a £258 million rights issue. Shareholders will vote on the TPG proposal on July 7.

B&B vehemently denied that it had refused to engage with Resolution or employed a strategy that gave the firm insufficient time to perform due diligence. “The board has consistently made clear to Resolution that it was prepared to allow due diligence should an acceptable indicative proposal be made,” the bank said. It said that the revised proposal did not meet the board’s concerns about certainty, funding, clarity, change of control and price.

— Barclays shares fell by almost 2 per cent after Citigroup analysts said that the bank may need an additional £9 billion to be sufficiently capitalised, on top of the £4.5 billion that it is raising from foreign investors.

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