LONDON (Reuters) - Scotland's biggest building society, Dunfermline, is to be put up for sale after the government decided not to rescue the struggling lender, Scottish authorities said on Saturday.
Scotland's First Minister Alex Salmond said the Treasury had rejected a bailout after talks with his government and the building society.
"(We) are deeply disappointed that the Treasury now believe it is not possible to sustain the society as an independent institution," he said in a statement.
A spokesman for the Scottish government added that the lender would have to be "put up for sale" because it could no longer operate as a going concern.
A spokesman for the company said it was holding a board meeting on Saturday afternoon and there would be no further comment until after it had finished.
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A British finance ministry spokesman declined to comment on the reports.
"We do not comment on individual institutions as the monitoring of institutions is a matter for the Financial Services Authority," he said.
No one at the FSA could be reached for comment.
Regulators decided it was no longer viable after the building society told them it would announce 26 million pounds of losses next week, the BBC said in an unsourced report on its website.
Dunfermline is Britain's 12th largest building society and employs nearly 500 people in eastern Scotland.
It had been hoped that the government would rescue the lender with a package worth between 60 million pounds and 100 million pounds, the BBC report said.
The financial crisis has already forced Britain to nationalise the mortgage book of Bradford & Bingley and to take large stakes in two other banks, Royal Bank of Scotland and Lloyds Banking Group.
(Reporting by Peter Griffiths; Editing by Giles Elgood)
