Sir Peter Burt, one of the two Scottish knights attempting to parachute themselves into HBOS's boardroom, disclosed on Wednesday that he had personally lost more than £1 million from the collapse in the bank's shares.

Sir Peter, former chief executive of Bank of Scotland, said that he remained a shareholder in HBOS and had lost a sum “in seven figures” because of the slide in its share price over the past 18 months.

He criticised HBOS's board for failing to negotiate better merger terms with Lloyds TSB and for then allowing the deal to be watered down once more, to the disadvantage of HBOS shareholders. “Given their performance, I wouldn't buy a used car from this bunch,” he told The Times.

Sir Peter also floated the idea that a standalone HBOS could free billions of pounds of capital through a sale and leaseback of assets such as property.

Sir Peter and Sir George Mathewson, former chairman of Royal Bank of Scotland, are calling for the sacking of Lord Stevenson of Coddenham, HBOS's chairman, and Andy Hornby, its chief executive, and for the Lloyds TSB deal to be scrapped.

In a statement yesterday, they lamented a lack of debate about the proposed takeover and argued that the Government's £50 billion bailout plan for all banks had completely changed the banking landscape and undermined the necessity of the deal, negotiated a few days before the bailout.

“There has been a complete absence of both transparency and debate on whether or not HBOS shareholders are receiving reasonable terms,” they said. “Likewise, there has been no discussion about whether HBOS could continue as an independent bank.”

Sir Peter said that Sir Victor Blank, chairman of Lloyds, was a great dealmaker, adding: “This may be his best- ever deal. But the flip side is: is this such a great deal for HBOS shareholders?”

HBOS shares, which were above £11 in March 2007, were languishing at 96.8p on Wednesday. Sir George said that he owns no HBOS shares.

Sir Peter said: “A properly recapitalised, properly run and independent HBOS appears to be in the interests of the shareholders, its employees, its customers and all stakeholders, avoiding the dangers of an anti-competitive over-mighty leviathan.”

The Burt/Mathewson proposal has received short shrift from most HBOS institutional shareholders, who say that it contains nothing concrete.

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