Senior Alliance & Leicester executives last night rounded on non-executive directors of the Irish bank - many of whom would have lost their jobs had the deal gone through - accusing them of seeking to overturn what had already been agreed.
They highlighted the fact that the governing Court of the Bank of Ireland, which reads like a list of Ireland's great and good, contains powerful individuals such as Niall FitzGerald, the executive chairman of Unilever, and former Jefferson Smurfit chairman Howard Kilroy, who were pushing for a substantial change to the terms in BOI's favour in the wake of the hostile reception accorded to the deal by both the stock market and the Irish media.
But the Irish hit back, accusing Alliance & Leicester of gross misrepresentation and saying nothing had been signed on 24 May when the banks were bounced into confirming the talks. The Irish version is that the deal foundered on the refusal of Alliance & Leicester to agree to a request made on 1 June to grant Maurice Keane, the BOI chief executive who was to become chairman of the joint group, a casting vote.
The Alliance & Leicester's corporate affairs director, John Caine, who was part of the negotiating team, said last night: "There was no single deal-breaker. What happened is that we thought we had a deal on the basis of what was announced on 24 May. Since then they have been asking for change after change in a salami-style operation. Our board was not prepared to continue the horsetrading, particularly as we have not been able to explain to the market the logic of the deal."
Since the outline terms were announced prematurely last month, the share price of Alliance & Leicester has risen sharply while BOI's has fallen, reflecting the markets' view that the Alliance would clearly have come out better.
Senior Alliance & Leicester sources added last night that the bank had been prepared to go along with virtually all the demands made by the Irish, and pointed out that the initial deal already allowed for BOI to have 55 per cent of the combined group and both the chairman and deputy chief executive.
The British bank did, however, demur on Irish requests that the bank's prestigious Dublin offices retain full group headquarters status and was adamant that the allocation of main board positions should not be reopened.
Alliance & Leicester shares fell 2 per cent on 877p yesterday even though the collapse of the merger talks was only announced after the stock market closed yesterday afternoon. The shares are expected to fall further today. The BOI was up 1p to 1074p.