BRITAIN'S high street banks have agreed to buy a large chunk of shares to rescue troubled Bradford & Bingley, it was reported today.

The buy-to-let lender's share price dropped to 34p yesterday, down from a high of 539p in March 2006. The bank's £400m rights issue offered shares to existing investors at 55p.

But underwriters could be forced to buy the bulk of the shares.

Reports say that the six high street banks - HBOS, Abbey, Barclays, Lloyds TSB, Royal Bank of Scotland and HSBC - have stepped in after being leaned on by the Financial Services Authority.

They had already promised to buy the shares which Bradford & Bingley's main underwriters, American investment banks UBS and Citigroup, do not buy - a procedure known as `sub-underwriting'. If they do, the big banks would end up owning around 30 per cent of their rival.

B&B has reported mounting arrears within its buy-to-let borrowing base, as property owners struggle with repayments.