Investment group Resolution, which wants to pump £400m into troubled UK lender Bradford & Bingley has been denied access to the bank's books.
Resolution has said the proposal is part of a wider £2bn scheme to breathe life into the UK's smaller banks and lenders hit by the credit crunch.
But B&B rejected the plan, saying it would mean Resolution in effect taking control of the company.
Now Resolution says it has "not been granted due diligence access by B&B".
Resolution said it was "considering its next move".
B&B has already announced a rights issue and an investment injection from a US firm.
It plans to sell a 23% stake to private equity firm Texas Pacific Group (TPG) for £179m, and is asking shareholders for £258m in a rights issue.
Under Resolution's plan, the group would invest £2bn in the sector over the next two years, bringing together banks and lenders hit by the credit turmoil to create a "new, larger and stronger bank".
The company had said some of B&B's key investors were interested in its plan to shake up the UK's smaller banks.
Financier Clive Cowdery, who runs Resolution, already owns a 2.9% stake in B&B.
B&B will give shareholders a chance to vote on its plan on 7 July.
The UK's biggest buy-to-let lender has been hit hard by the freeze in the credit markets.