Mortgage bank Abbey National yesterday rebuffed Lloyds TSB's near £20 billion conditional offer, saying the terms of the proposed deal "remain inadequate".

The bank said its board had met to consider the pre-conditional offer, announced on January 31, and noted the terms were "the same as those proposed by Lloyds TSB in December".

It added the "proposed offer terms remain inadequate and subject to material uncertainties".

Lloyds' proposed cash and share bid had been conditional on Abbey recommending the offer and also on the deal not being referred to the Competition Commission - a decision which was expected by February 23.

The proposed deal prompted uproar from unions concerned about the thousands of job cuts which would be made through branch closures.

Lloyds had said its plans would see an expected 9,000 jobs lost from the combined total of 100,000 staff over four years, although there were fears this toll could be far higher, with one union estimating 20,000 jobs could go.

The bank's conditional bid had also gatecrashed merger talks ongoing between Abbey and Bank of Scotland.

A statement from Lloyds said: "We are disappointed that the Abbey National board has not recognised the merits of our business case, which we believe is very compelling.

"Although we are disappointed, this response does not change our position. We will continue to present our case to shareholders over the coming days and await the OFT decision."

Lloyds added the pre-conditions to its offer could be waived.