Bradford & Bingley investors who expected the would-be suitor Clive Cowdery to ride immediately to the bank's aid might like to think again.

After walking away from a possible deal with the mortgage lender via his Resolution takeover vehicle last week, he is in no rush to re-enter the fray.

Despite the support of the bank's largest shareholders for a Resolution deal, Bradford & Bingley had declined to open its books, leading to Mr Cowdery's decision to withdraw.

And while there was little sense of celebration in the Resolution camp yesterday, there were said to be wry smiles at TPG's withdrawal and a recognition that a better time to do a deal may yet emerge.

Resolution does not intend to consider a possible move at all at least until after the now-delayed extraordinary meeting of B&B is held later this month.

Under the now-revised bailout plans, the bank will effectively be owned by shareholders who were friendly enough with Resolution to have worked alongside it on its failed offer.

Mr Cowdery may then decide whether he is still interested and, if so, was expected by analysts yesterday to make a bid at closer to 20p per share.

The concern in the Resolution camp is that its stated long-term ambition to consolidate several struggling British lenders and enhance their creditworthiness might be distracted by the challenges involved in resuscitating B&B.

Taking a year or more to bring the bank back up to AA - the rating that Mr Cowdery wants - could distract him from other possible takeover plans.

One source close to the Resolution team, said: “There are plenty of people ringing the phone off the hook today, saying ‘go, go, go' but you have now got to drag B&B back up to AA and that is a big ask. Why would Resolution jump in now?

“Three weeks ago, B&B and their advisers were throwing into our faces the fact that we could not give them certainty until the third or fourth of July but our deal would have been done by now and instead they have no certainty.

“The screw-up by the board is one of the biggest that I have ever come across. It is bigger than Northern Rock or Equitable Life. It is unbelievable. Clive has identified 15 opportunities for acquisition and many of them are now more attractive than B&B.”

There are concerns that the Moody's rating downgrade that triggered a clause that allowed TPG to exit the deal could be the first of several to hit the bank. Further credit downgrades would exact an increasing toll on B&B's finances.

At the beginning of June Fitch put B&B on “ratings watch negative”, which means that it was considering downgrading the bank, but it said yesterday that it was unlikely to make a decision for at least three months.

Standard & Poor's said yesterday that it would keep B&B on the negative ratings watch that the agency invoked on June 13.

The City was scathing of B&B's predicament and critical of the management.

Pali International, the financial services company, reduced its target price for the bank to zero in a stinging attack on the bank's management, which was criticised for allowing TPG a get-out clause from what had appeared to have been a done deal.

One reason the Resolution offer was rejected by Rod Kent, B&B's executive chairman, was because TPG's proposal offered greater certainty.

Bruce Packard, banking analyst at Pali, said: “We believe that the depositholders' money is safe but from an equity shareholder perspective we believe that the investment is unattractive on a risk/reward basis.

“Given pressure on rating agencies to be quicker to downgrade, we think that an agency downgrade to B&B was probable, in which case we have to wonder why its executive chairman allowed TPG to insert the clause.”

No break fee was written into the deal by B&B unless it decide to pursue an offer from a suitor other than TPG, effectively allowing the private equity group to walk away without a penalty.

Alex Potter, banking analyst at Collins Stewart, said: “The management appears to have been quite shoddy recently and handling the company badly. Shareholders have the right to be angry.”

There are also concerns that B&B's business may be in more trouble than had previously been thought.

Analysts at Dresdner Kleinwort said: “It suggests that the internal workings at B&B are not very attractive and that perhaps the portfolios are deteriorating faster than currently expected by the markets.”

Analysts at Numis said that there was now a 25 per cent chance of B&B going bankrupt.

The swift and sudden deterioration of the UK housing market, and the large exposure of B&B to the buy-to-let sector - it is the largest such lender in the country - is also thought to have played a role in breaking the deal.

The Bank of England gave a warning yesterday that home loan defaults were growing faster than the banks had previously anticipated, Alex Potter, banks analyst at Collins Stewart, said: “The buy-to-let market has never been stress-tested in a downturn so we have no way of knowing whether £400 million is enough to keep the bank going.

“The last time the housing market was down, around 1992, the buy-to-let market was tiny.”

Even Goldman Sachs, the US investment bank that is advising B&B, is bleak about the prospects for banks.

The US investment bank yesterday lowered its 2008-10 forecasts for more than 40 European banks, saying that some of them may have to raise between €60 billion (£47.5billion) and €90 billion euros to shore up their finances in the face of a credit crisis that has now lasted for almost one year.

Goldman Sachs analysts said in a note that European banks under their scrutiny had sustained asset writedowns of $134 billion (€85 billion), offset by capital increases of about $115 billion.

The deal killers

Credit downgrades
Moody’s downgrades the bank a credit notch, triggering a clause in the deal terms agreed with TPG and allowing it to legally withdraw its offer to inject £179 million of fresh capital into the bank

Housing market deterioration
The latest data shows a steep slide in the prices and number of transactions in the housing market

Credit market conditions
The Bank of England said yesterday that defaults on home loans had risen more than expected. It added that the credit crunch would continue to tighten, further reducing the availability of lending to consumers already struggling to remortgage or secure other loans

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