by business editor Trevor Sturgess

Savers and borrowers with Kent Reliance Building Society are being given a last chance to thwart its controversial bid to become a bank.

The Financial Services Authority (FSA) has announced that a hearing about the proposed transfer of its assets to a bank will be held early next year.

After members narrowly voted for the plan, the FSA has been examining the merits of the case. If officials rule that it can go ahead, OneSavings Bank Plc and a new member-owned Kent Reliance Provident Society could be in business as early as February.

Opponents claimed that the proposal to change the structure in return for a £50 million injection by New York-based equity investor J C Flowers (JCF) risked the future of the 150-year Chatham-based institution.

But a majority backed the society's directors who warned that, without change, competition from taxpayer bailed-out banks and FSA rules demanding bigger capital reserves threatened the survival of the society as an independent body.

They also said that it would enable the business to offer more services, open more branches and agencies, and better compete with other financial institutions.

If the FSA gives the go-ahead, KRPS - a mutual organisation - will own 59.9 per cent of the bank, and JCF 40.1 per cent.

The FSA hearing will be held at 25 The North Colonnade, Canary Wharf, London on January 6.

It said: "The purpose of such hearings is to give interested parties an opportunity to make oral representations and to enable the FSA to make such inquiry as it considers necessary, both of those making oral representations and of the applicants."

The FSA added that so far, only one person had signalled their intention to make representations.