While details remain sketchy, Sir Peter Burt and Sir George Mathewson confirmed they are sounding out potential backers who may also include overseas financiers.

Sources informed Scotland on Sunday that the pair had made approaches, and yesterday Burt confirmed this. "We are talking to a number of institutions to see if they would be prepared to support George's and my arguments," he said.

Burt, former chief executive of Bank of Scotland, and Mathewson, former chairman of the Royal Bank of Scotland, want the proposed deal to be scrapped and for them to be installed in place of HBOS chairman Lord Stevenson and chief executive Andy Hornby.

Any financial backing behind their intervention would help strengthen their appeal to shareholders who insist the Lloyds TSB deal offers certainty and stability.

Burt was encouraged by a letter from Stevenson to HBOS shareholders on Friday that suggested a standalone HBOS may require only £500m of further funding to the £11.5bn provided by the Government.

"There are certainly plenty of institutions that could provide that sum," said Burt.

Mathewson played down the likelihood of the pair instigating a rival bid but said all options were being considered to recapitalise the bank.

"I think the key word is 'alternatives' to the existing merger. It might involve capital, external capital.

"I am not going into explanations. The first stage is for people to seriously consider that there are alternatives and to establish what the Government's position would be.

"It could include anything. I am not saying we could do this or that. Peter and I have been saying from the beginning that the HBOS board should be evaluating as many different options in the market, and I am not just talking about the stock market."

Mathewson admitted their attempts to overthrow the board and restore HBOS to independent status was a long shot. "I realise we are fighting an uphill battle. My goal is to ensure the market is looking at these issues."

He accused Stevenson of alarming shareholders. "Lord Stevenson used the word nationalisation as a deliberate piece of obfuscation which cannot be taken to mean confiscation. To a lot of people it would mean 100% Government owned."

Asked why he thought HBOS was determined to push through the merger, he said: "I don't know. It was the quickest and right solution at the time, but things have changed."

He challenged the view that the Lloyds deal was the only option because HBOS was bust. "You could say that all the banks apart from Barclays are bust.

"They need additional capital which is not available from the private markets and Lloyds is just as bust as HBOS.

In his letter to HBOS shareholders posted on Friday, Stevenson warned that the bank would have to be nationalised if they did not vote on December 12 in favour of the £5.7bn merger.

City analysts favouring the merger say that it offers stability and certainty for both banks, but critics warn of massive job losses and argue that the deal offers poor value for all shareholders. Lloyds TSB shareholders are expected to support the merger at an EGM in Glasgow on Wednesday.

Stevenson indicated that support for an independent HBOS could be higher than the £12bn and that such support could not be guaranteed.

Burt responded by claiming that Lloyds requires more support than HBOS. He also argued that HBOS was the most efficient bank in Britain.

"If it is in such bad shape why did the chairman of Lloyds TSB say this was the deal of the century?" he said. "If RBS (which is also being part-nationalised] can survive there is no reason why HBOS cannot survive as an independent entity.

"Lord Stevenson says he doesn't know what the terms will be," said Burt, who added that "we are all comparison shoppers these days" and said the Government should look at all options.

John Stewart, outgoing chief executive of National Australia Bank, warns in an interview with Scotland on Sunday today that the banks receiving bailout funds could be dependent on their governments for a considerable time.

He says: "One of the problems with the guarantees is it will be difficult to get off the drug.

"So many banks are now dependent on this support and it will be many years before they can stand on their own again."