Brown dismisses rival bid to rescue HBOS; IN ASSOCIATION WITH Rensburg Sheppards Market watch.

Byline: BY LOUISE HOSIE

GORDON BROWN yesterday dismissed calls for Lloyds TSB's takeover of HBOS to be scrapped - insisting it was the only "serious" bidder.

Despite reports that the Bank of China was in early talks over backing a rival offer, the Prime Minister said there was only one "realistic" option.

Mr Brown's comments came after two senior bankers voiced opposition to the deal, claiming it would be bad for shareholders and reduce competition.

Sir George Mathewson and Sir Peter Burt - former chief executives of Royal Bank of Scotland and HBOS respectively - have asked to be put in charge instead.

But the premier told his regular Downing Street press conference: "The problem is that apart from Lloyds TSB no serious bid that is funded has actually come forward.

"There has been no announcement by any financial institution that it is prepared - apart from Lloyds TSB - to take on the problems as well as the opportunities of HBOS.

"I think people have got to be realistic about that."

He added: "It is not going to change much if one person says he wants to, or they want to, take over a bank if they have got no money behind them. And that is the issue we face at the moment."

The Bank of China is said to be in discussions with former HBOS executive Jim Spowart and investment company European American Capital over a possible counterbid.

But Mr Spowart told The Scotsman: "We took a decision early on to neither confirm or deny which bank was behind any potential bid."

Lloyds TSB says it will be able to deliver annual cost savings of more than than pounds 1.5bn by the end of 2011 through its deal.

But there are fears it could lead to widespread job losses at the would-be combined banking giant. Scotland could be especially badly hit if the headquarters is not located there.

HBOS has resisted the attempt by Sir George and Sir Peter to take charge, and insisted that the Lloyds TSB deal offers "certainty".

Derek Simpson, Unite joint general secretary said: "Unite has serious doubts about the plans by Sir Peter Burt and Sir George Mathewson and their motives.

"They have failed to come up with any concrete proposals or any money, and it is irresponsible of them to threaten the proposed merger between HBOS with LTSB.

"We have serious concerns that the extreme arrogance of these two individuals will lead to the nightmare scenario in which HBOS collapses."

He added: "The future of these important financial institutions is now at stake.

"The proposals by these two individuals merely smacks of egos and special interest rather than the livelihoods of our members who work at both HBOS and Lloyds."

But the union boss came under fire from SNP MSP Alex Neil.

"This is an incredibly bizarre response from someone whose interests should be protecting the jobs of HBOS and Lloyds TSB employees at all costs," said Mr Neil.

"It reads more like a defence of the Prime Minister.

"If the takeover is allowed to go ahead up to 40,000 HBOS and Lloyds TSB employees could face job losses - they should be Mr Simpson's primary concern.

CAPTION(S):

Sir Peter Burt: Sir George Mathewson: Gordon Brown answers questions at yesterday's press conference