Members could change the direction of Standard Life's history

About 2.4 million members can vote on the proposal, with 75% support of those voting needed for it to be proceed.

If approved, the firm plans to list its shares in July, triggering �1,000-plus share windfalls for about half of Standard Life's eligible members.

The outcome of the ballot will be announced at a meeting on Wednesday.

Reducing risks

In the event of a flotation, eligible members will get a minimum of about �500 in shares, rising in some cases to more than �1,000 depending on how much they have invested and for how long.

Standard Life has argued that demutualisation is necessary to protect people holding "with profits" policies who it believes will face growing financial risks in the future.

The board thinks there is an overwhelming logic for demutualisation and would like members to support it Standard Life spokesman Why Standard Life changed its mind over demutualisation Standard Life in Edinburgh

"With profits" policyholders receive bonus payments based on the performance of the shares and bonds they have invested in, and their rewards depend on the overall performance of the business.

The Edinburgh-based organisation says a flotation will reduce the risks to members, while allowing it to raise far more capital than as a mutual.

It expects to raise more than �1bn from the flotation - which could value the business at up to �5.5bn - to strengthen its business.

Members who have not already voted by post will be able to cast their ballot in person at a special meeting in Edinburgh on Wednesday.

Standard Life's management have urged members to endorse the proposals and are hoping for a million people to back the plan, giving them as strong a mandate as possible.

"The board thinks there is an overwhelming logic for demutualisation and would like members to support it," a Standard Life spokesman said.

"First things first, we would like them to participate in the vote and, then, to vote in favour."

U-turn

The demutualisation must then be approved by the Court of Session in Scotland, although this is thought likely to prove a formality.

Standard Life reversed its position on demutualisation two years ago, after opposing calls for changes to its structure in the late 1990s.

PROPOSED FLOTATION TIMETABLE May 31: Members vote on proposed demutualisation. Outcome of vote published June: Court of Session in Scotland to hear appeal for proposed demutualisation June: Shareholder prospectus published July: Standard Life floats on stock market.

A vote on the matter in 2000 - triggered by campaigner Fred Woollard - was defeated with 54% of voting members rejecting the plan.

Standard Life, which invests more than �110bn on behalf of clients as well as offering pensions and mortgages, says market conditions and its own financial position have changed significantly since then.

However, one member has threatened to take legal action to try and stop the demutualisation, should it be approved.

More than two million policyholders who are not members are unable to vote in the ballot, while members who took out "with profits" policies after March 2004 are also ineligible.