Vote outcome

Guaranteed policyholders Vote by value For: 98.1% Against: 1.9% Turnout: 75.2% Vote by number For: 97.3% Against: 2.7% Turnout: 57.2% Non-guaranteed policyholders Vote by value For: 99.0% Against: 1.0% Turnout: 68.9% Vote by number For: 99.0% Against: 1.0% Turnout: 44.7%

The package will see policyholders with guaranteed pension returns give up their guarantees in return for a one-off 17.5% boost to the value of their investments.

This will allow Equitable to cap its future liabilities and, the company hopes, avoid financial collapse.

Other policyholders will receive a smaller one-off payment in return for agreeing not to sue the company for mis-selling.

'Overwhelming'

The Equitable said the compromise had been "overwhelmingly" supported by policyholders.

"This is an important day for our policyholders," said chairman Vanni Treves. "Of course there is much still to do and many challenges lie ahead."

The package had to win the approval of at least 50% of policyholders by number, and 75% by policy value.

Equitable had warned that the savings of more than one million people were be at risk if the deal had been rejected.

Court battle

Equitable's problems began in 1999 when it found that it could no longer afford to pay long-standing policyholders the pension they had originally promised when interest rates were higher.

The policyholders took the company to court when it tried to back out of its previous commitments.

Equitable Life lost the court battle and was left with huge legal bills, as well as being forced to pay the policyholders what it said it could no longer afford to.

As a result, it was forced to close to new business in December 2000 and sold part of its business to the Halifax - now part of HBOS - last February.

Rescue package

In order for the deal to go ahead it requires approval from the High Court, and a five-day hearing is due to begin on 4 February.

If the agreement goes through before 1 March then Equitable will secure an extra �250m from the Halifax.

Under the package, policyholders with guaranteed pensions will receive an average increase in their pension fund of 17.5% in return for giving up their guarantees.

Meanwhile those without guarantees will get an average uplift of 2.5% in return for giving up any claims they may have for mis-selling.

But approval of the deal may not be the end of Equitable's problems.

Many thousands of Equitable members are expected to withdraw their funds from the mutual once they have received their lump-sum payments.