Bosses at Standard Life are thought to be furious with the company's advisers, Merrill Lynch and UBS, after a stinging rebuke from the Takeover Panel for the way the Edinburgh firm's £4.9bn bid for Resolution has been handled.
The Takeover Panel reprimanded the insurance giant last week for breaching takeover rules by indicating it might improve its offer for Resolution without committing to do so.
The only reason Standard Life had not parted company with the banks was that it would be impossible to replace them given the timing and complexity of the deal, sources said.
Standard Life is now thrashing out a new bid structure that could thwart Pearl, which owns 24 per cent of Resolution and has said it would oppose the Scottish group's offer.
City analysts have questioned whether Standard Life can afford to raise its cash and shares offer beyond the original 715p bid level, already bettered by the 720p all-cash counter-bid tabled by Pearl.
Standard Life issued a statement late on Friday on the benefits of its proposed merger, revealing a cost savings target of at least £71m a year until 2010.
But synergies would be hard to realise after a takeover because Standard Life would need support from 75 per cent of shareholders to push through reforms such as fund amalgamation.Reuse content