James Crosby of Halifax (left) settles with Equitable's Chris Headdon

GE Capital also proposed to levy large charges from fundholders for services the Halifax proposed to provide at cost.

And the offer was conditional on sales force retention targets and future levels of funds under management.

Halifax's offer, while partly dependent on sales targets and approval from holders of disputed Equitable Life policies, is believed by observers to be less complex.

Chris Headdon, chief executive of Equitable, said: "For six months GE Capital has been involved in the sales process and consistently been the lowest bidder.

"Now at the 13th hour, it puts forward a break-up proposal that is highly conditional, contains elements which work against the interests of policyholders and which has even yet to be approved by its board in the US."

UK expansion

GE Capital is the largest private label credit card administrator in Britain.

It is believed to have been interested in using and is mainly interested in Equitable's administration and fund management units to broaden its reach in UK financial services.

Equitable put its assets up for sale last July after a landmark House of Lords ruling forced it to honour guarantees to holders of so called guaranteed annuity rate policies, leaving the mutual insurer with a funding gap estimated at �1.5bn.