NFU Mutual Insurance the general and life insurer yesterday pledged to resist any attempt by members to force the society to abandon its mutual status and said any takeover bid would be unwelcome.

In response to weekend press speculation that a former senior manager, John Murray, was trying to drum up support in the City for a conversion campaign the company moved swiftly to underline its commitment to mutuality.

The society which is among the last of a dwindling band of mutual life and pension houses said that a change of status would see policyholders facing higher costs for pensions and insurance which would dwarf any possible windfalls.

It denied any knowledge of plans to start a conversion campaign by any members including Murray who the Sunday Telegraph reported had had discussions about a possible bid with investment banks.

The newspaper reported that Murray was working on plans to try to a hostile takeover attempt or a campaign by members to force NFU Mutual to float on the stock exchange in a move which could value the company at around (pounds) 3bn.

It is thought that Murray, who could not be contacted yesterday, might hope to capitalise on widespread difficulties in the farming industry. Problems like BSE and foot-and-mouth disease have left many farmers facing ruin who might support a move in the hope of wind-falls.

With a number of insurers ready to spend large sums to grow by acquisition demutualisation moves could lead to interest from the likes of Aegon or Eureko, the newspaper suggested.

However, the reports were discounted by Aegon, while senior life industry figures

noted that finding a buyer for the group, which combines dispar-ate general insurance and life businesses, might not be easy.

While NFU Mutual is a relatively low-profile operation compared to rivals such as Standard Life, the 91-year-old company is Britain's 10th-biggest insurance group. Last year NFU Mutual had 850,000 business and individual policyholders

and funds under management of (pounds) 8.7bn.

The company was established to look after farmers but now targets a broad rural consituency and around 54% of last year's (pounds) 1bn premium income came from non-farmers. General insurance, including motor and personal insurance, made up 66% of the total.

In response to increasing pressure on mutuals by carpet-baggers, who hoped to win support for conversion by promising members big pay-outs, NFU Mutual has required new members to sign any wind-fall entitlement over to charity in the last two years.

It is thought that less than half the policyholders would qualify for windfalls which it has been suggested could be as much as (pounds) 25,000 for some members.

However, a spokeswoman for NFU Mutual last night said the windfall estimates represented pure speculation.

Although the society had no knowledge of any valuation which Murray or others might be attaching to NFU Mutual, she said directors were sure it would never make financial sense for members to give up mutuality.

Without shareholders to consider the company was able to offer highly competitive premium rates and investment returns for members and continue to write specialist cover suitable for a mainly rural clientele which other firms would not be interested in providing.

A spokesman for Aegon UK dismissed suggestions that the Edinburgh-based owner of

Scottish Equitable might be interested in buying NFU Mutual. ''We have made it clear we are not interested in acquiring general insurance businesses,'' he said.

A senior Scottish life industry source noted that some trade buyers might be interested in buying the life and pensions assets. But separating these from the general insurance business would be a very complicated exercise, he said.