Shares in Bradford & Bingley plunged 9 per cent today after a US private-equity house walked away from a deal to bail out the troubled bank.

They fell 53/4p to 551/4p after Texas Pacific Group abandoned at the last minute plans to inject £179 million - forcing the bank to redraw a £400 million fundraising package to bolster its balance sheet.

Leading City institutions stepped in to provide the capital in an emergency deal orchestrated by the Financial Services Authority, but this was not enough to prevent a heavy sell-off of shares.

The collapse of the TPG deal led to calls today for the head of Rod Kent, the B&B chairman who became executive chairman in May following the departure of chief executive Steven Crawshaw due to ill health.

Kent is under intense pressure from angry shareholders, and one City source said the running of the bank had long been a shambles.

Justin Urquhart Stewart of Seven Investment Management said: "At a time when you lose your chief executive, you look to the chairman to give you direction, but this sort of direction looks like someone sailing through a fog bank without a chart.

"Rod Kent is not covering himself in glory. To get someone like TPG involved and then see them back out at the last minute means the directors and management of B&B ought to look for career alternatives."

B&B today insisted it continues to be well-funded, although Kent said he was disappointed at TPG's decision. Sources said he was furious.

TPG had pledged to pay £179 million for a 23 per cent stake in the mortgage lender alongside a £258 million rights issue at 55p a share. However, it turned its back late last night after credit rating agency Moody's downgraded B&B.

A clause in the agreement allowed TPG to pull out if the lender was downgraded. As it became clear yesterday that such a move was imminent, the FSA pressed TPG for a decision.

It is thought TPG was also spooked by bad news about the economy and, after meetings of the investment committee and boss David Bonderman, decided the investment was too expensive.

The FSA orchestrated an alternative package with current shareholders. M&G Investment Managers, Legal & General Investment Management, Insight Investment and Standard Life Investment agreed to buy into the new expanded £400 million rights issue.

The same four had backed a plan by entrepreneur Clive Cowdery to inject £400 million, but B&B's board rejected the proposal and Cowdery walked away.

This is the third fundraising attempt by B&B. It initially proposed a rights issue at 82p a share but abandoned the plans, instead opting to raise money at 55p a share alongside the investment from TPG.

The now expanded rights issue is underwritten by investment banks Citi and UBS and will be put the shareholders at an extraordinary general meeting in the week starting 14 July. Kent is likely to face a hostile crowd.

Read the Moody's rating note in full