The chairman and founder of Resolution, Clive Cowdery, plans to leave if a £4.9 billion all-cash takeover bid from arch-rival Pearl succeeds in the so-called battle of the zombie funds, it was suggested yesterday.

Resolution has previously rejected two initial approaches from Pearl, run by Hugh Osmond, a rival to Mr Cowdery.

But it is now thought likely to accept a third offer after another suitor, Standard Life, withdrew from the bid battle over the weekend.

Mr Cowdery was yesterday understood to be considering options in the financial sector, but Resolution's spokesman gave no details.

"Clive has hugely developed plans for the future, but will not be discussing them until certainty for Resolution shareholders has been delivered," a spokesman said.

Resolution, which specialises in taking over and running life funds that are closed to new business, grew out of the September 2005 merger of Resolution Life Group and Birmingham-based Britannic.

It has about seven million customers and invested assets of more than £61 billion.

Cazenove said in a note: "In just four years, Clive Cowdery's Resolution has swallowed RSA Life, Britannic, Abbey National Life, Scottish Mutual and Scottish Provident.

"We feel confident he would be welcomed back into the sector with open arms by investors who have profited from his dealmaking and strategic nous."

Resolution also declined to comment on the future of Resolution chief executive Mike Biggs who has been reported to be a possible candidate for the top job at erstwhile merger partner Friends Provident.

Pearl said yesterday that it had raised its stake in Resolution to almost 178 million shares, or 25.93 per cent of the stock.

Meanwhile, Standard Life shares staged a relief rally on news of its withdrawal from the bidding battle for Resolution.

They gained nine per cent in initial trading following Sunday's announcement that it had pulled out of the UK's biggest ever insurance takeover battle.

The Edinburgh-based insurer had seen its cash-and-shares offer battered by a falling share price, with the stock on Friday hitting its lowest level since demutualisation last year.

Standard Life had been expected to try and salvage its takeover hopes by restructuring or possibly upping the bid, but ruled out both options, saying neither would offer shareholders a good deal.

Analyst Barrie Cornes of Panmure Gordon said while shares were on the rise, the group's reputation had suffered a knock.

"The move on Resolution will have damaged its standalone credibility and it will face questions on strategy going forward," he said.

The market will want to know why it had wanted to do the deal in the first place, given its "previous conservative mantra of steady organic growth post IPO.

"In particular, investors will want reassurance that it does not need additional cash, that there was no split on the board, why the third quarter new business figures were so disappointing and what is the strategy for the group going forward."

There were rumours in recent days of a division among board members over the deal and its benefits.

Standard Life would have become one of the UK's leading life and pensions firms with about seven million customers if its bid had been successful.

However, it would have sold the Resolution "zombie" business on to insurer Swiss Re for a reported £2.35 billion.