LONDON (AP) - Shares in Bradford & Bingley plc. (B&B) rose sharply yesterday with two camps wrestling for control over a significant stake in Britain's biggest buy-to-let mortgage lender.

B&B shares rose 13.6 percent to 75 pence ($1.48), a day after Resolution plc. went public with a plan to spend £400 million ($787 million) shoring up the lender's financial position.

B&B said it continued to recommend a proposal by Texas Pacific Group (TPG) to take a 23 percent stake in the company, coupled with a rights issue to raise £258 million ($508 million).

The company said it planned to go ahead with a shareholders meeting on July 7 to seek approval for the TPG proposal.

Resolution said it had been invited by major B&B investors including Standard Life, Legal & General, Prudential and Insight, who oppose the TPG plan. Those four companies hold a combined stake of 13 percent in B&B, and were concerned that the TPG proposal would dilute their holdings.

Although Resolution's chief backer, Clive Cowdery, says it was called in by those shareholders, "we believe that other investors will need much more information/reassurance before they are willing to put the control of B&B in his hands," said Nic Clarke, analyst at Charles Stanley & Co.

"The fact that B&B has already had to restructure its rights issue shows that this segment of the banking sector is currently a complex minefield to navigate. Investors will want to see a strong line up of personnel at Resolution, with banking experience, to give this proposal creditability," Mr. Clarke said.

Resolution wants to make B&B the springboard for the acquisition of smaller banks and mortgage lenders.

B&B has been hard hit by Britain's real-estate slump. The company lends money to people who invest in rental properties.

B&B said in May that it needed to raise £300 million through a rights issue, with shareholders offered 16 shares at 82 pence ($1.61) each for every 25 shares they held.

In June, the company changed tack, announcing the TPG proposal and a restructured rights issue offer 19 shares at 55 pence ($1.08) each for every 25 shares held. It said the plan would raise a total of £400 million.

The lender has been particularly vulnerable to the crisis in money markets because it previously raised more than a quarter of its capital through wholesale funds.

B&B revealed earlier this month that customer payments are more than three months late on five percent of the loans it has purchased from GMAC-RFC Ltd. B&B took a £36 million ($70.9 million) impairment charge for the four months to April 30, as it acknowledged that the arrears from the GMAC-RFC mortgages were higher than anticipated.

Under a deal it signed in 2006, B&B must still buy around 2.1 billion pounds ($4.1 billion) worth of mortgages from GMAC-RFC by the end of next year, but said it has cut back its purchases to a minimum.

Royal Bank of Scotland plc. recently raised £12 billion ($23.6 billion) in Europe's biggest-ever rights issue. HBOS plc. hopes to raise £4 billion ($7.9 million) from its shareholders and Barclays plc. announced last week that it was considering a rights issue.