It has all the elements of a good novel. High finance, fierce passions and pure greed intertwine in a race to get hold of hundreds of millions of pounds. As the story comes to a thundering conclusion, and tensions run high, the future of one of the country's oldest financial institutions hinges on the result of a knife-edge vote.

Welcome to the world of carpetbagging. No wonder it has become a national obsession!

The rather curious phrase, which immediately conjurs up images of visiting Allied Carpets on a Saturday afternoon, was in fact derived form the aftermath of the American Civil War when soldiers from the victorious North sought to profit from the defeated Southerners.

Rich rewards

Michael Hardern gives his tips on carpetbagging

In the UK the term has come to describe speculators who pour money into building societies in the hope that they can reap rich rewards when the societies turn into banks.

Millions of people joined the gold rush, hoping to make a quick profit. And profits they made. Canny investors watched the money roll in as a succession of leading societies lost their mutual status and joined the brave new world of the stock market. For a minimal investment, members received pay-outs of as much as several thousand pounds.

Save our Building Societies' Bob Goodall: 'It is democracy with a bribe'

However, as the craze gathered pace the carpetbaggers wanted more. Members joined the remaining building societies in droves in an effort to force them to convert.

Depending on which side of the fence you sit on, the villain or the hero of the piece is Michael Hardern. He has become a self-styled 'carpetbagger-in-chief'.

An eccentric former royal butler, who has campaigned for building society members to become members of the House of Lords, he has been instrumental in marshalling the carpetbagging campaign.

New Year resolution

Carpetbaggers are saying: 'Show me the money'

Whilst most people were preparing for a New Year's Eve party, Mr Hardern was busy tabling resolutions aimed at forcing six of the largest remaining societies to become banks. Meanwhile the Bradford & Bingley, the UK's second largest building society, is under attack from another carpetbagger, Stephen Major, a quantity surveyor from Northern Ireland.

Michael Hardern: "It is close to saying 'Give us £1,000 to subsidise somebody else's mortgage'"

The building societies are under siege - and they are mustering their defences ready for the titanic tustle ahead.

They have already had some success in repelling the carpetbaggers. The Portman, the Coventry and the Yorkshire Building Societies have managed to block the resolutions after Mr Hadern failed to get enough support from other members - partly because he did not study the membership rules closely enough.

The Brittania has also thrown out a resolution to convert, although Mr Hardern will still stand as a board candidate on the carpetbagging ticket.

But the building socieites movement will face its D-Day (or perhaps C-Day for carpetbagging) on 26 April. That is the date that Bradford & Bingley holds its annual general meeting and where members will have to vote on the controversial conversion resolution which could result in windfalls of around £1,000 for the society's 2.5m members.

Bradford & Bingley's management insists it is only an "opinion poll" and that it is not duty bound to act on the result. However, a strong majority in favour of conversion could put the it under intense pressure to give up its mutuality.

Let battle commence

So can the building societies beat the carpetbaggers, or are mutuals an endangered species?

Michael Hardern attacks the building societies' management

Mr Hardern is in a confident mood and is determined to fight on despite his recent set-backs. He told BBC News Online: "The (building society) memberships should be worth £1-2,000 and anybody who is a member....needs to sit tight. I think it is only a matter of time. The boards are digging in at the moment, but there is no guarantee that they are going to get their way. If the money is there I think the members are going to want it."

The Nationwide has narrrowly defeated calls for conversion - so far

He added: "The caravan will move on to next fixture, which will probably be the Nationwide and the West Bromwich. At some time the ice will start cracking. I think it is quite wrong for boards to say that you cannot have your windfall. It is as close as you can get to saying give us £1,000 so we can subsidise somebody else's mortgage."

However, the building societies are not going to give in easily.

Five leading societies, including the Nationwide, Brittania, Yorkshire, Coventry and Cumberland force new members to donate any windfalls to charity.

Others, such as the Portman have stopped accepting new members. Meanwhile societies like Leeds & Holbeck have raised the minimum balance for savers to qualify for membership to £3,000.

Portman's John Gully: "We are completely committed to remaining a building society'

John Gully, head of communications at Portman said: "Our board remain completely committed to continue to run Portman as a traditional building society because we believe that is best for our business as a whole, best for customers and best for staff."

The Save our Building Societies (SOBS) movement, which has won the backing of nine MPs, is also fighting a rear-guard action for the societies.

It plans to step up its campaign over the next few months to try to get the UK Government to make it more difficult for members to force demutualisation by raising the number of people required to put forward resolutions and preventing such resolutions being put forward every year.

Mr Goodall is even lobbying for societies to be given charitable status.

Chopping the carrot

Save our Building Societies' Bob Goodall: 'An effective defence is to limit the level of windfalls'

However he admits that there is only one sure-fire way to defeat the carpetbaggers - reduce the windfalls on offer so they are not worth bothering about.

"If the carrot is smaller then there will be less incentive for carpetbagging," Mr Goodall said.

It appears that the rich pickings available a few years ago have diminished. Birmingham Midshires members will only get around £400 following its acquisition by the Halifax.

In fact somebody who had invested say £3,000 in the stock market over the past 18 months, instead of locking it up in a building society savings account hoping for a windfall, would have made at least an extra £600.

Portman's John Gully: 'If somebody wants a bet they are better off going down the bookies'

Mr Gully said: "I think really that the heady days of several thousands of pounds are arguably long gone and if somebody wants to have a bet, they are better off going down the bookies really - and they will have a bit more fun as well. Looking at an account pass book for the next 20 years is probably less interesting than watching your horse come home first."

However some financial analysts believe building societies will have to convert, with or without pressure from rebel members.

Preaching to the converted?

Ken Murray, who runs Murray Financial, an investment fund set up to buy building societies, believes that competitive pressures and the recent spate of financial mergers will force more conversions.

"Bradford & Bingley, Brittania and Nationwide - they all have to convert. They are dealing with competitors which by the day are becoming larger and more efficient. There is no scope for any financial institution whatsoever to do nothing in this rapidly changing business environment."

"Rubbish," says the Building Societies Association (BSA).

Portman's John Gully recognises the conversion threat but pledges the society will fight on

Pam O'Keefe of the BSA told BBC News Online: "Building societies have lots of things on their side. For example Derbyshire Building Society competes head to head with the Halifax as people know it just as well in that area. What we have actually seen is people going back to the building societies."

If building societies did die out, the BSA believes it would lead to much higher borrowing costs.

Ms O'Keefe points out that recent research shows nine of 10 cheapest lenders are building societies. Nationwide customers with a £50,000 mortgage are currenlty paying £250 a year less in interest charges compared with customers at some of the societies that have converted into banks.

No pain, no gain

In other words carpetbagging could lead to short-term gain but long-term pain.

Whatever the consequences of conversion, carpetbaggers are not going to stop now.

Michael Hardern: 'Everybody wants something for themselves'

Mr Hardern, who has personally made £6,000 and a lot of publicity from carpetbagging, believes the Bradford & Bingley vote will set the cat among the pigeons. "You have got two greedy sets of people and everybody wants something for themselves. The advantage is going to somebody else if members don't take their windfall. If they want to do that then that is fine but they should be asked."

The Internet, which allows carpetbaggers around the country to communicate much more easily, is also helping to fuel their campaign.

Ace in the pack?

Building societies have already erected formidable barriers to carpetbaggers, but Mr Hardern claims he has another "ace up his sleeve". He is coy about just what he has in mind, but recommends that carpetbaggers and their families still join building societies, even if they have to sign their windfalls away.

Carpetbagging may not provide the lucrative opportunities it once did. Windfalls are waning. However it is far from dead. And there are already signs it is spreading to other financial sectors such as life assurance companies.