Europe's biggest mutual life insurer Standard Life is understood to be considering a £4 billion flotation on the stock market.

The move, which would trigger windfalls for the society's 2.6 million policyholders, comes after it emerged the mutual was locked in talks with City regulator the Financial Services Authority over the interpretation of new "realistic" accounting measures.

The Edinburgh-based society has previously been a staunch defender of its mutual status.

Other options understood to be under consideration include raising capital in the bond market, or demerging its North American Business Standard Life Canada or Standard Life Investments, which currently has around £86.5 billion under management.

Standard Life declined to comment on the speculation.

Monday January 12, 2004