AIB'S chances of acquiring the Co operative Bank in Britain have suffered, following the collapse of the Galileo bid for the Co operative Wholesale Society.

Because AIB has been publicly associated with the hostile break up move on CWS by Mr Andrew Regan's Galileo, market sources have suggested that the CWS board would not look favourably on either an independent approach by AIB or its involvement in another bidding consortium. The Co operative Bank is part of the Co operative Whole sale society.

AIB remains interested in acquiring the Co operative Bank, a spokeswoman said yesterday. She declined to discuss AIB plans following the collapse of the Galileo bid. The bank had discussions with Mr Regan, whose Lanica Trust was behind the Galileo bid, but had not entered into any agreement with Mr Regan, she insisted.

The spokeswoman refused to comment on a report in the London Independent that AIB had hired private investigators to look into Mr Regan's affairs. According to the report, CWS approached private investigators, Kroll and Associates, to mount a surveillance operation on Mr Regan and his advisers. But they were told that the firm was already looking into Mr Regan's affairs for an other party - AIB. CWS then hired the security firm Control Risks for the job.

The Galileo bid floundered amid a flurry of threatened legal actions as CWS mounted a staunch defence. While Co op Bank would be a suitable acquisition for AIB, whether AIB would now be an acceptable buyer to CWS is open to question.

Co operative Bank has a strong franchise in the northwest of England and is estimated to be worth between £250 and £350 million.