An audacious plan to hijack Lloyds TSB�s agreed takeover of HBOS by extricating the Bank of Scotland from the group and buying it for £6bn was yesterday described as �a fantasy� by a high-ranking HBOS insider.

An audacious plan to hijack Lloyds TSB's agreed takeover of HBOS by extricating the Bank of Scotland from the group and buying it for £6bn was yesterday described as "a fantasy" by a high-ranking HBOS insider.

The plan, concocted by Scottish nationalist MSP Alex Neil and Intelligent Finance founder Jim Spowart, is to persuade a group of top Scottish bankers to make the £6bn bid and buy out the Bank of Scotland part of HBOS before it merges with Lloyds TSB.

The idea is grounded in the logic that it would keep jobs in Scotland, and retain the Bank of Scotland as an independent institution north of the border - but also that Halifax and Bank of Scotland could be structurally demerged from one another, Political consternation has run high in the Scottish Parliament over the impending disappearance of Edinburgh-headquartered Bank of Scotland amid HBOS's £12.2bn rescue takeover by Lloyds TSB.

Neil said: "What we want to explore is the possibility of getting a group of people with the financial clout to buy out the Bank of Scotland part of HBOS before it merges with Lloyds TSB.

"That would save the Bank of Scotland as an institution and also make sure that Scotland has a substantial organisation headquartered in Scotland."

Prior to the takeover agreement, for which the government has already signalled it willingness to waive com-petition rules for the merger that would create the UK's biggest retail bank, HBOS had become a victim of its own strategy. It had relied too heavily on the increasingly expensive wholesale credit markets to raise large chunks of the funds which it lends on to its customers, and its share price plunged.

The takeover is expected to lead to about £1bn in costs savings and could lead to thousands of job losses as the two banks employ 139,000 staff and have 3100 branches.

While Neil and Spowart's plan may have found political support, the notion was unequivocally deemed as unrealistic in a number of financial quarters.

A spokesman for HBOS yesterday told The Herald: "There is one deal on the table, and the acquisition by Lloyds TSB is a good deal for shareholders."

Asked if Lloyds TSB was concerned about the potential challenge from the group of Scottish bankers, an insider at the London-based bank said: "This is not something that has come to our attention in a serious way."

Those among the Scottish financial elite expected to be invited include Sir George Mathewson, former chief executive of the Royal Bank of Scotland, leading financier Sir Angus Grossart, Sir Peter Burt, former chief executive of the Bank of Scotland, Gavin Masterton and George Mitchell, both former managing directors of Bank of Scotland as well as Spowart.

A highly-placed insider at HBOS added: "This is really just a fantasy. I don't see how the Bank of Scotland and Halifax could be separated. The commercial and retail aspects of the bank are intrinsically linked and they reinforce one another as part of the structure.

"One could not exist without the other."

An insider at the Financial Services Authority used the word "fantastical" in relation to the Scottish challenge.

However, Neil insisted: "It wouldn't be easy to separate the Bank of Scotland from Halifax, but that doesn't mean it couldn't be done. Demergers have happened in the past.

"The takeover still has to be approved, so it's not yet a done deal."

Nonetheless, the Financial Services Authority is understood to have contacted a number of other banks last week, including HSBC, and Lloyds TSB was the only lender willing to take on HBOS without a large government guarantee.

News of the Scottish challenge first emerged in the Sunday Herald newspaper yesterday, in an article written by Kenny Kemp, a friend and former business associate of Spowart.

Asked about his connection with Spowart, Kemp said: "We have no business dealings at all, although we are good friends.

"We did have a connection in that we were both directors at PeoplesChampion.com, but that was sold to SMG and neither of us have any connection with it any more."

Meanwhile, Burt yesterday said had not been contacted and the other members of the group could not be reached for comment.

However, Neil said none of the group had yet been reached.

"We'll be contacting the people over the next 24 hours," he said.

Asked about the publicised £6bn buy-out figure, Neil added: "That didn't come from me. That was the Sunday Herald which put that figure in - but it may not be that far off the mark."