Bradford & Bingley’s largest shareholders were forced to rescue the bank's capital-raising effort last night as TPG Capital, the private equity group, pulled out of a £179 million deal.

TPG had agreed to take a 23 per cent stake in the lender but, after learning of an expected downgrade of B&B’s rating by the ratings agency Moody’s, the fund’s managers are thought to have walked away.

However, the bank is believed to have set in motion a contingency plan that it had discussed with the Financial Services Authority, under which some of B&B’s shareholders would put up the £179 million. The rest of the £400 million required is to come from shareholders in a rights issue.

The shareholders involved are thought to include some of those who supported last month’s failed attempt by Clive Cowdery, the insurance entrepreneur, to push through an alternative to the TPG offer.

Mr Cowdery’s investment group, Resolution, was refused access to B&B’s books by the bank’s board.

TPG’s apparent withdrawal was in reaction to expectations that Moody’s would cut the troubled lender’s rating today by one notch to Baa1, in the bank’s second downgrade since the fundraising was announced.

A rating of Baa1 would leave B&B with the lowest credit rating of any of the big British banks and could potentially make it more costly for it to raise funding in the financial markets.

Shareholders are due to vote on B&B’s rights issue on Monday. They have been infuriated by the potential sale to a private equity firm, which investors believe contravenes their pre-emption rights. But they are expected to vote the capital-raising through because there is a dearth of alternatives for propping up the lender.

TPG had plans to hold on to a share of B&B for five years and to add to the company by acquiring other small lenders.

UBS and Citigroup, the rights issue’s underwriters, are expected to support the company through a downgrade. The investment banks have already been criticised for threatening to halt their underwriting once, when B&B incurred worse-than-expected mortgage arrears.

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