The best defence against such predatory attention is to break out quickly from this uncomfortable middle ground by acquiring something itself. But the problem with the life mutuals is that they are flavour of the month. A host of big players, such as the Pru, Sun Alliance, Abbey National and NatWest, are furiously jockeying to buy, and several deals are said to be bubbling just below the surface. There are enough about, the Scottish and Irish banks, the Pru and BAT among them. In the crush, however, only a few will succeed. Of the pretenders, Woolwich's prospects look among the shakier. Halifax, which is also converting to bank status next year, benefits from being the biggest and arguably the best of the old mutuals.

Alliance & Leicester, although on the small side, has the advantage of already being significantly more diversified than most societies, with about 40 per cent of its profits coming from non-mortgage-related business.Woolwich has no such obvious advantages. It is a successful, large building society, but will make a vulnerable, middle-sized bank. Shaken by the controversial sacking of Peter Robinson, its chief executive, a few weeks ago, Woolwich is probably getting more than a few calls from interested acquirers. Retail financial services is already an overcrowded sector. From all directions, building societies, insurers and clearing banks are elbowing each other to get onto the same patch of lucrative turf, where financial conglomerates will take deposits, sell mortgages, pensions and insurance, and look after long-term savings and investment requirements across the board A number of building societies have such pretensions.

The fact that the society has been putting itself about quite vigorously in recent months among a handful of life mutuals suggests that it doesn't buy its own story either. The letter also questions what level of job losses would occur.. Woolwich Building Society's belief that flotation is a strategy sufficient in itself to take the company into the next century has never been entirely credible. The concerns are voiced in a letter from Clive Wilkinson, chairman of the Ofwat customer service committee for the region, to local MPs, local authorities and consumer groups. Mr Wilkinson is particularly concerned about what might happen to prices, pointing out that the average domestic water and sewage bill for Severn Trent customers is pounds 201 compared with pounds 329 for householders in the South- west."Any policy of bill harmonisation could increase charges to existing Severn Trent customers significantly," he writes.The letter also highlights other problem areas such as the danger that Severn Trent will be inhibited from funding its own capital investment programme by the cost of mounting a bid for South West.Mr Wilkinson goes on to warn that the "substantial numbers of senior executives" that would need to be diverted from Severn Trent to South West to make the takeover successful was bound to weaken its ability to deliver improved services. The water industry watchdog Ofwat has warned that the planned takeover of South West Water by Severn Trent could lead to higher bills, poorer services and lower investment for customers in the Midlands.

Bifu claims up to 500,000 more may go in the next few years.The claim of 10,000 redundancies at Lloyds TSB was denied yesterday by a spokeswoman, who said that with 6,000 staff turnover each year, the bank could absorb that scale of necessary departures.. Up to 60,000 jobs have been lost in the financial industry in the past five years. No jobs are safe in Bristol or Birmingham and we are concerned that there will be many more to follow around the country."The bank's warning of mass job cuts among Lloyds TSB's 87,000 staff follows a wave of redundancies within the entire banking sector. A register of volunteers for redundancy was being opened and the bank hoped to redeploy many staff in Birmingham.The announcement was attacked by the banking union Bifu, which claimed the redundancies were only the first of what it claimed were likely to be 10,000 job losses as a result of the merger.John Townsend, Bifu's assistant secretary at TSB, where the redundancies are centred, said: "This is just the start.