Peter Birch, chief executive, attacked building societies that want to become mutual banks regulated by the Bank of England.
He criticised the idea that they should be allowed to compete directly with banks without accountability to shareholders and without any dividends to pay.
And he warned that if deregulation went too far Britain could experience the same financial disaster as America faced after its savings and loans institutions were freed from restrictions in the 1970s.
He said: 'There's a place for mutuality in the UK and building societies are highly regarded. The disaster that followed American deregulation is too horrendous to contemplate.'
Mr Birch's remarks, at a banking conference in Cambridge, reflect growing alarm among banks about the competitive threat of building societies, which are being allowed further freedoms in their business activities as a result of a government review of the 1986 Building Societies Act. A new Treasury paper on improved accountability is due in the next few weeks.
Abbey National is likely to be doubly sensitive about the issue because it went to the trouble of converting from a building society to a bank to gain new freedoms in the way it conducts its business.
Mr Birch said: 'Board members may well feel comfortable as a mutual building society, but I believe they need to become more accountable to their members who are, after all their owners - with little say.'
Mr Birch suggested building society boards should be obliged to put all takeover offers to their members. If they receive a reasonable bid approach they should also be forced to make their list of members available to the bidder.
He also backed a suggestion first made by Rosalind Gilmore, the building societies commissioner, that building societies should pay a dividend to their members.
Although he objected to the idea of a mutual bank - suggested by societies such as Halifax - Mr Birch agreed with the proposal that building societies and banks should have a single regulator to report to at the Bank of England. He believed the Building Societies Commission should be absorbed into the Bank of England's supervision department.Reuse content