A leading shareholder in HBOS and Lloyds TSB was considering a proposal last night by two Scottish banking grandees to derail the £12 billion merger of the two lenders.

Standard Life, which gave the takeover its blessing last month, effectively killing off hopes that HBOS might remain independent, said that it was looking at the proposal by Sir George Mathewson and Sir Peter Burt.

Sir Peter, who was chief executive of Bank of Scotland between 1996 and 2001, accused the management yesterday of running HBOS into the ground. He wants to be installed as chief executive, with Sir George as chairman, and says that their extensive banking contacts would provide a strong management team.

The HBOS board dismissed the plan unanimously over the weekend. Sir Peter and Sir George said that they would take their bid to control the company straight to shareholders, claiming that they had received significant backing. They are preparing for a charm offensive. Fairfax, the investment bank advising them, has registered a campaign website, www.independenthbos.com, which is expected to go live this week.

A spokesman for Standard Life, which, with a 3.5 per cent stake, is a top-five shareholder in HBOS, said that it was looking at the proposals.

Yesterday Sir Peter branded the present management of HBOS a “busted flush”. He said: “We are saying that the HBOS board should put in two new directors who are independent and whose recommendations will not be tainted by past failure.We think the HBOS shareholders have been sold short and we don’t think the takeover is in the public interest.”

Yesterday Sir Peter named Sir Howard Davies, the former Financial Services Authority chairman, and Lord Smith of Kelvin, a former director of both banks, as possible independent arbiters, should objections be raised to himself or Sir George.

An HBOS spokesman said: “We see no basis for any further discussion with [Sir Peter and Sir George]. They are not offering our shareholders anything in the way of tangible financial benefits. We’re proceeding with our recommended deal with Lloyds TSB and it’s very much on track.”

Lloyds TSB said the proposals were “irresponsible” and “lacked credibility”. Lloyds TSB shareholders will vote on the deal on November 19. It was reported yesterday that Lloyds has lent HBOS £10 billion to help it to meet wholesale funding requirements.

Sir Peter and Sir George, who have come out of retirement to try to block the takeover, argue that the Government’s recapitalisation of the banks means that there is no need for the deal. The bailout came three weeks after the rescue of HBOS. They assert that an independent HBOS would not require any more government funding than the £11.5 billion already secured.

At the time of HBOS’s near-collapse, Sir Peter ruled himself out of a rescue plan, saying: “I’m not sure any of the grandees . . . have the sort of money that’s required and the question is would such a package make any financial sense?”

Sir George said yesterday: “The situation has changed dramatically since they did the deal. It was an instantaneous reaction to being in serious, instant trouble. With the bailing-out, as it’s called, that situation no longer exists. Therefore, it is worthwhile considering other options.”

However, some industry sources have suggested that the move was politically motivated. Sir George is a nationalist who supported the SNP at the most recent election. Alex Salmond, the First Minister of Scotland and SNP leader, hailed Sir George and Sir Peter yesterday as “two of the greatest bankers of their generation”. One industry source said: “This is just a very public and rather inelegant job application.”

Jim Spowart, the Standard Life Bank founder, who emerged last week as a broker of a rival bid on behalf of an unnamed foreign bank, welcomed Sir Peter’s attempt to win control of the bank. He said yesterday: “I think it’s good news. There are now two fronts running, with the change of management [proposed by Sir Peter] and our front. But a new management would be easier to deal with.”

The Government, which says that the proposed deal is a matter for shareholders, is understood to be critical of the plan to derail the deal.

About 55 per cent of the combined share capital of Lloyds TSB and HBOS is held by institutional investors with stakes in both.

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