TPG was unrepentant about its decision to withdraw from a planned £179 million stake in Bradford & Bingley last night and hinted that it may look at other opportunities in UK banks.

A source close to the American private equity firm, which manages about $30 billion (£15 billion) of assets, said that it backed away from the relatively small investment because of concerns about a downturn in the market as well as the downgrade in B&B's credit rating.

The source said that while TPG had expected Moody's to downgrade B&B by one notch, two was too much and had “serious implications” for the assumptions that it had made about the underlying business. He continued: “In the short term people might want to point the finger at us. But we stepped up to the plate with three days' notice when B&B needed funding and we were very transparent about our conditions ... In the future, if other banks find themselves in trouble, they'll at least be able to turn to us and say that TPG understands the UK banking market.”

Some analysts suggested that TPG was worried about B&B's exposure to the buy-to-let market.

The idea for the deal was planted when Goldman Sachs, which is advising B&B, set up a meeting between Philippe Costeletos, the co-head of TPG, and the bank in March. However, talks did not become serious until it became clear that B&B's rights issue was struggling. The deal was settled in a matter of days before the announcement.

TPG is no stranger to controversy in the UK. Mr Costeletos, who masterminded the B&B deal as well as the earlier buyout of Debenhams, the high street chain, had his picture displayed at Glastonbury last year as part of a rogue's gallery of private equity put up by GMB, the union.

With CVC, another private equity giant, TPG made a failed takeover bid for Sainsbury's last year.

Some believe that TPG's management of Debenhams, which has performed poorly since it was relisted in May 2006 after two and a half years under private equity ownership, has led to the retailers' faltering sales. TPG bought the business with CVC and Merrill Lynch, took it private and then increased the debt on its balance sheet. All three investors made huge returns on their original investments when Debenhams returned to the stock market. Punch Taverns, the pub chain, was also owned and refloated by TPG.

The private equity firm also came under fire for its management of Gate Gourmet, the airline catering business that hit the headlines in August 2005 when it fired 600 workers for going on an unofficial strike, and British Airways staff walked out in protest. About 900 flights were grounded during the dispute.

TPG's interests in the US have gone a little more smoothly. It owned Burger King for four years before refloating it in 2006, and owns Neiman Marcus, the department store chain. It recently bought TXU, the Texas utility group, with KKR for $45 billion in the biggest private equity buyout.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax