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The board had met to discuss the revised proposal to inject £400m into Bradford & Bingley through Cowdery's investment vehicle Resolution.

However, The Financial Times reported that the board rejected Resolution's request to carry out due diligence as part of his proposed rescue plan because of the additional uncertainty and delay his proposal would create.

Resolution's proposal, which was initially rejected on Tuesday before being revised, would have usurped Texas Pacific Group's (TPG's) plans to take a 23 per cent stake in Bradford & Bingley for £167m.

It would have also ended the lender's plans to raise a further £258m in a rights issue.

Under Resolution's amended proposal, the Bradford & Bingley board would have retained full control of the lender, although it had asked to nominate up to three non-executive directors to the board.

Cowdery now has until 7 July, when Bradford & Bingley will hold an extraordinary meeting to vote on the TPG deal, to come back with another proposal.