Dunfermline bail-out talks progress, but no deal agreed

Published on 24/03/2009 21:03

TALKS between the UK government and the Dunfermline Building Society reached a critical stage last night, with both sides believing they were close to securing a deal to save the troubled society. The Dunfermline is under threat because of expected £26 million of losses this year and write-downs from its commercial loan book of up to £90 million.

The building society needs government help to survive, and ministers and representatives of the Financial Services Authority have been in talks with building society managers for weeks to try to put a package together to safeguard the institution and its savers.

It is understood that talks had progressed significantly but, by last night, a deal still had not been secured.

Willie Rennie, the Liberal Democrat MP for Dunfermline and West Fife, said last night: "There are a series of complex issues that require to be resolved.

"I told Ann McKechin (the Scotland Office minister] today that it was vital that such a trusted institution of 130 years remains an independent Scottish mutual."