THREE former directors of Halifax Bank of Scotland (HBOS) face being banned for life from serving as company directors after being blamed for the collapse of the banking giant.

Business Secretary Vince Cable has ordered an investigation to find out if there is evidence to begin disqualification proceedings against Lord Stevenson, the former HBOS chairman, and former chief executives Sir James Crosby and Andy Hornby for their role in the bank's collapse in 2008.

Yesterday, it emerged Sir James is sitting on a pension pot worth up to £25 million despite his central role in the mortgage giant's collapse.

His annual retirement income from the failed lender is estimated at £700,000 a year.

The former actuary was chief executive of HBOS from 1999 to mid-2006, when he left with a pension entitlement of £572,000 a year that was tied to inflation. It is understood this has now risen to £700,000 a year.

It is also believed he would have been entitled to draw his pension when he left HBOS at the age of 50.

Mr Cable says the investigation is the first step in a process that could lead to the trio – who have not yet faced formal sanction – being barred from acting as company directors.

The Liberal Democrat minister told officials at the Government's Insolvency Service to investigate whether there is sufficient evidence to start disqualification proceedings against the three.

He is understood to have issued the order on Friday after the Parliamentary Commission on Banking Standards said the executives presided over a "colossal failure" and should not be allowed to run financial companies in the future. Mr Cable wants to go one step further and prevent them from serving on any boards, no matter what sector.

Sir James stepped down from his role as an adviser to Bridgepoint, the investment company, but remains chairman of car credit company Money Barn, a senior independent director for catering firm Compass and a trustee for Cancer Research UK.

It is understood Sir James could be gone from the board of Compass within a week, as the company faces pressure following the parliamentary report.

Andy Hornby is a director and chief executive of Gala Coral betting and gaming group.

Lord Stevenson is chairman and co-founder of investment company Manocap, director of Cloaca Maxima consultancy and Waterstones, a director and business consultant with opera and arts promotions company Glyndebourne Productions, president of Aldeburgh Music, a trustee of the Tate Foundation and a non-executive director of Western Union, Loudwater Partners and The Economist.

An adviser to the Business Secretary said yesterday: "Vince is completely outraged by what has happened. This is something he feels very strongly about."

The adviser said the ban was one of a number of sanctions Mr Cable wanted to consider, adding the directors' HBOS pensions would also be under scrutiny.

HBOS collapsed in 2008, wiping out shareholders' assets and costing thousands of jobs.

The bank was forced to merge with Lloyds in early-2009 and received a £20.5bn taxpayer bailout in what was one of the most high-profile casualties of the UK's banking crisis.

In its report, the Banking Standards Commission expressed frustration that City regulators had taken no steps to consider banning the three from involvement in financial services.