NatWest 3 in race to set up bail fund

Lawyers for the NatWest Three are considering setting up a US company with money from family, friends and supporters, to back a multimillion-dollar bail fund.

The extradited men are scrambling to find ways to convince a Texan judge that they would not abscond if they are allowed to return home to the UK, pending their trial on seven fraud charges.

The former bankers - David Bermingham, Gary Mulgrew and Giles Darby - are accused of defrauding their ex-employer National Westminster Bank of $7.3m (£4m) in a complex deal involving the collapsed energy company Enron.

They were released on temporary bail on Friday and, after a night staying at the home of their lawyer close to the shore of Lake Houston, have moved to a hotel in the area. The men narrowly escaped having to spend the week in a federal detention centre, but they remain under curfew and electronically tagged. Mr Mulgrew described his situation as "jail with a view".

Fifty friends of Mr Mulgrew pledged to pay $50,000 if he should abscond while on bail in the UK, but Judge Stephen Smith said an American court had no way to judge the creditworthiness of the individuals.

One friend said: "These pledges are not from big businessmen, these are lifelong friends and family who haven't much more money than they are pledging. If he breaks bail, he bankrupts his aunt." Lawyers are examining whether some of the friends could put the cash up front or into a specially created company registered in the US or Britain.

Judge Smith will decide this coming Friday whether the men can return to the UK. Federal prosecutors say that they should be forced to stay in the US because, after waging a two-year legal and public relations battle against extradition, they could not be trusted to return voluntarily to face trial.

The alleged fraud involved persuading NatWest to sell a stake in an Enron subsidiary for $1m to a company in which the three men had a financial interest. The company sold it on just days later for $20m. The three bankers shared the profit with Andrew Fastow, the disgraced chief financial officer of Enron, and another Enron finance department employee. The three say there was nothing illegal about the transaction.

Enron used similarly complex financial side deals to artificially inflate its earnings in the years before its spectacular collapse into bankruptcy in December 2001.