A deal to buy the Lehman Brothers fixed income division in London has fallen through at the last moment, throwing 600 UK jobs into doubt.

Hopes that Nomura, the Japanese securities house, would snap up the division evaporated yesterday when a 4pm deadline passed with no offer being made to administrators at PricewaterhouseCoopers. Nomura declined to comment but it is thought that despite being able to buy the business for a peppercorn sum, it pulled out because of the considerable capital backing it would have required.

Nomura bought Lehman’s equities and investment banking units in London this week, potentially saving more than 2,000 jobs.

There were conflicting reports last night over whether any other bidder was interested in the fixed income division. Earlier this week PWC said that it was exploring all possible options for it.

Stars in the division were already starting to vote with their feet, with a team of seven in interest rate sales, led by Cedric Pauwels, defecting to Citigroup yesterday.

The division trades bonds and other fixed income securities and helps clients to raise capital by issuing new bonds.

Lehman Brothers filed for Chapter 11 bankruptcy in the United States 13 days ago after the US Government chose not to underwrite a rescue deal. Its European division, Lehman Brothers International, was put into administration.

Nomura has moved quickly to lock in staff in the equities and investment banking arms, promising a $1 billion guaranteed bonus pool regardless of performance in the rest of the year.

Up to 2,000 Lehman jobs in London are not yet secure. PWC is still trying to find buyers for the the fund managment arm Lehman Brothers Asset Management (Europe).

PWC filed a court order this week seeking nearly $8 billion (£4.3 billion) transferred from the Canary Wharf offices to the bank’s US holding company just before the collapse.

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