Dunfermline building society on sale after 'collapse'

The Dunfermline will be put up for sale after the building society all but collapsed, it has been reported.

Scotland's largest building society had been in line for a government bailout of between £60 million and £100 million but will be put of the market after regulators ruled a huge loss was likely.

However, prime minister Gordon Brown is said to have promised savers savers their money is secure despite the collapse.

BBC Scotland reports that the building society's risky assets - including a £9 million loss in its own IT business - were likely to lead to a £26 million loss in total.

And the firm's regulators - the UK government, the Bank of England and the Financial Services Authority (FSA) - are to announce the Dunfermline's forced sale next week, it is believed.

Alex Salmond, Scotland's first minister, said the Scottish government was "deeply disappointed" the Treasury believed it was not possible to sustain the Dunfermline.

He added a capital contribution to help maintain the building society and to find guarantees for its lending to social housing projects in Scotland.

"That offer remains on the table, but it does require Treasury approval," Mr Salmond said.

"We welcome the indications that social housing finance is also a priority of the Treasury, but are deeply disappointed that the Treasury now believe it is not possible to sustain the society as an independent institution, given the importance to Scotland of HQ jobs and functions.

"We hope that the Treasury has not closed its mind to the idea that both in terms of employment, and in terms of value for money for the public purse, maintaining Dunfermline Building Society as an independent and ongoing concern could well be the strongest option, and in the interests of its members and depositors."