So-called "carpetbaggers" hoping for windfall payouts have targeted eight building societies for conversion to banks: Britannia, Chelsea, Coventry, Portman, Skipton and Yorkshire and Bradford and Bingley.

The first seven of these have received resolutions from Michael Hardern, a former royal butler, seeking conversion.

Mr Hardern, who almost succeeded in forcing the Nationwide to demutualise last July, has also put himself forward for election to the boards of the societies.

The Bradford and Bingley has received a similar resolution from Stephen Major, a quantity surveyor from Northern Ireland. A spokesman for one of the targeted societies said he believed the two men were working together on the conversion campaign.

Mr Major has supplied a list of 50 other society members who support his proposals, which will be put to the society's annual general meeting in April.

For the resolution to be valid, the 50 members must have been with the society for at least two years and have had minimum savings or mortgages during that time.

Promise of windfalls

Members for Conversion, a group co-ordinated by Michael Hardern, believes members at the eight targeted societies would receive between £522 and £1,281 - at least - if conversions went ahead.

David Anderson: Denies members could make £2,000

The Yorkshire said it had received formal notification from Mr Hardern that he plans to put himself forward for election to the board and propose the society take immediate steps to convert to a bank.

David Anderson, chief executive of the Yorkshire, said it would vigorously oppose Mr Hardern's plan.

"Mr Hardern is not a member of the Yorkshire and has no legitimate interest in its affairs," Mr Anderson said. He also dismissed Mr Hardern's assertion that Yorkshire members could expect £2,000 each if the society converted. Mr Anderson said such a figure was not borne out in previous cases of conversions.

Mr Hardern launched a similar bid to convert the Bradford and Bingley last year but his bid failed after it emerged his 50 supporters did not meet the full membership criteria.

'Asset-stripping'

The mutual-to-bank campaign could lead to a flood of demands for new accounts from people chasing windfalls.

Bob Goodall, co-ordinator at Save Our Building Societies, which opposes converting building societies to banks said the government must act to prevent what he called "asset-stripping".

He argued that conversion would lead to worse service and rates for members. Building societies which are floated on the stock market and must make profits for shareholders cannot offer the same service or competitive rates as building societies which are answerable only to their members, he argued.

"1999 could be a defining year for the building society movement," he said. "We will lobby MPs vigorously to introduce primary legislation to amend the Building Society Act 1986 to remove the section that allows for demutualisation."

He added: "Carpetbagging is not a freebie but is in fact asset-stripping, legalised theft from future generations."

The trend towards mutual societies turning into banks reached its peak in 1997 when the Halifax, Alliance & Leicester, Woolwich, Northern Rock and mutual insurer Norwich Union all converted.