Midshires is considering paying a sum, perhaps running into tens of millions of pounds, to RBS after reneging on a pounds 630m deal with the bank.
City sources said the Royal Bank of Scotland was expecting to be offered a substantial cash sum in order to compensate its shareholders for releasing Midshires from the agreement.
Midshires is barred from talking to other bidders in an "exclusivity clause" drawn up for RBS's bid last August.
The clause was insisted on by Mike Jackson, Birmingham Midshires' chief executive, who was also to be offered a job on the board of Royal Bank.
Midshires last week rejected the Royal Bank offer, scuppering the windfalls despite spending millions of pounds in preparation.
It is understood a cash pay-off for RBS is only one of the options under consideration.
According to other reports yesterday, Halifax could offer as much as pounds 10m in compensation. The bank wants any offer to come from the Midshires board, although the bank would utimately pick up the tab, it was claimed.Reuse content