A Scottish-led consortium was interested in a potential merger with the Dunfermline Building Society.

Financial services group Scottish Friendly Assurance said a consortium initially approached the stricken mutual in the middle of March, but was not given an opportunity to meet the building society until Sunday – less than 24 hours before a takeover deal was brokered with Nationwide.

The Glasgow-based company said face-to-face negotiations at an earlier stage could have resulted in a “Scottish-led solution” for DBS.

In a statement, Scottish Friendly Assurance said: “Scottish Friendly became part of a Scottish-led consortium that was interested in opening discussions with Dunfermline Building Society regarding a potential merger.

“Initial approaches were made in the middle of March to DBS with Scottish Friendly joining the consortium shortly thereafter.

“Although numerous attempts were made to open exploratory negotiations with DBS, we were not given an opportunity to meet with them until Sunday March 29, less than 24 hours before a deal was announced.

“While we are of course pleased that the position of DBS members has been secured, the announcement of today’s deal with the Nationwide precludes a Scottish-led solution that may have been a possibility if talks had been agreed between the consortium and DBS at an earlier stage in this process.”

Reckless lending led DBS to the brink of collapse with annual losses of more than £24 million before the Government was forced to step in.

The Treasury paid £1.6?billion to Nationwide as part of the deal, effectively as compensation for liabilities not covered by Dunfermline’s assets.

Stuart Bernua, executive director with Nationwide, explained how the deal for the Dunfermline had come about.

He told BBC Radio Scotland’s Good Morning Scotland programme that the Nationwide had initially been approached a few weeks ago to “see whether it was possible for us or other people to take over or merge with the Dunfermline”.

But he added that, after some work was done, the society “couldn’t see how taking it over would actually work for us”.

Mr Bernau went on: “On Friday evening at about eight o’clock, the Treasury and the Bank of England and the FSA decided that they couldn’t find a solution of someone to take it over or invest capital, so they decided that the best way to do it was to invite organisations to bid for the various assets and liabilities.

“We were involved the whole of the weekend, through the night on Saturday and Sunday, and it was confirmed at 7.45 on Monday morning that our bids had been successful to take over the prime mortgage book and to take over the savings.”