Optimism is growing at the Bradford & Bingley building society that the larger than expected number of members participating in the vote on its future status will mean overwhelming support for retaining its mutuality.

Following this week's announcement from the Britannia that butler-turned-carpetbagger Michael Hardern had withdrawn from elections for the board, it will be welcome cheer for supporters of the mutual movement.

But that cheer could be short-lived, according to Kenneth

Murray of Edinburgh-based Cairngorm Asset Management and Murray Financial Corporation. He is predicting a series of hostile takeovers for those building societies continuing to vote against conversion to banks.

This is no lightweight forecast. Murray's pronouncements on events in the financial services sector have proved remarkably accurate, and last month the Cairngorm Demutualisation Investment Trust out-performed both its chosen benchmark, the FT Fixed Interest Index, and the FTSE All-Share Index.

He commented enigmatically this week: ''We are looking to acquire building society and mutual life companies, but that is all I am saying at the moment.''

Monday's meeting of the Bradford & Bingley is due to start at 2.30pm and the marquee booked for it holds 1000 people. The result of the vote should be known by around 3.30pm.

There was no disguising the pleasure at Bradford & Bingley about the size of the vote. ''The number of postal votes is one-and-a-half million out of two-and-a-half million,'' said a spokeswoman. ''That means a massive turnout of 60%.

''We have always said that the higher the turnout the better for us. The carpetbagger types would be the first to vote. With the large numbers that have voted, that makes a close vote less likely.''

However, the view from outside the society was less sure. ''From what I heard the people in favour of conversion were in the majority,'' said Murray. ''I think the society should convert now to get access to capital and economies of scale. Any further delay is just damaging.''

He believes the vote could be close and that could be the signal for someone to put a hostile takeover bid together. ''We will see hostile bids soon,'' he said. ''If Bradford & Bingley doesn't convert now, it and the Nationwide and Anglia are very vulnerable.''

Murray pointed to the closeness of the vote at Nationwide to remain mutual. ''Nationwide was almost 50/50 in its vote. If Lloyds TSB bid for Nationwide it would go like a shot.

''The best outcome is that members vote in favour of conversion. As a plc you have capital. The argument is about being acquired or being an acquirer. To be an acquirer you need to have access to equity. The Alliance & Leicester can have a rights issue - Nationwide can't.''

Murray believes that the pace

of acquisitions will accelerate, dramatically reducing the number of banks. This will be driven by the need for banks with large branch networks to cut costs

heavily to compete with telephone and Internet banking.

''There are mergers happening rapidly now all over Europe,'' he said, ''because people understand the economic arguments.''

Three months ago Banco Santander, in which Royal Bank of Scotland had a 3.6% stake, entered a #27bn tie-up with its Spanish compatriot Banco Centro Hispanoamerico.

Societe Generale in France and Paribas had both expressed an interest in Credit Lyonnais when it is privatised - along with Credit Agricole, French insurance company Axa, and the German Allianz and Commerzbank - before they themselves agreed to merge. Then last month they were both subject to a #23bn bid by Banque Nationale de Paris.

Also last month Unicredito

Italiano of Milan made a #10bn bid for Banca Commerciale

Italiana and an alliance was announced between Banca di Roma and San Paolo IMI. Deutsche Bank has already agreed to pay some #370m for Credit Lyonnais's Belgian business and has bid #6bn for America's Bankers Trust.

Each of these groups will be worth more than #20bn and competing for a European savings and investment market forecast to be worth #12,000bn by 2002. Compared to that, most British building societies are not only small fry, they are being overtaken by the newer types of bank here.

''Standard Life Bank took in #1bn in nine months,'' Murray pointed out. ''Prudential took #3bn in three months. The vast majority of building societies could not get #1bn in 100 years

of trading.''

Direct Line shows the rapid development of telephone-based services by non-traditional banks, offering unsecured personal loans up to #25,000 over the phone and by last September its mortgage book balance had topped #1.4bn.

Its savings regime allows pooling by family and friends to receive higher rates of interest on their individual balances and it sells life insurance, pensions and other investment products in a joint venture with Scottish Widows.

Professor Amin Rajan, of the Centre for Research in Employment and Technology in Europe who researched London's future as a financial centre, warned: ''Technology is set to blow apart what remains of the traditional boundaries in the finance sector.''