Barclays's hopes of buying ABN Amro in the largest-ever banking deal suffered a serious blow last night when a commercial court in Amsterdam blocked the Dutch lender's $21 billion (€15.5 billion) sale of its US subsidiary to Bank of America.

The ruling is a victory for shareholders who had challenged the sale because it undermined a rival bid for ABN Amro by a trio of European banks led by Royal Bank of Scotland (RBS).

However, the decision could lead to further legal action. ABN Amro indicated it would respect the ruling but Bank of America is likely to file a substantial claim for legal damages against ABN Amro for breaching the sale contract that could extend uncertainty about the Dutch bank's future.

Judge Huub Willems ruled that although it was the decision of ABN Amro's management to sell the subsidiary, called LaSalle, the deal could not be separated from its takeover by Barclays and should therefore be put to shareholders. He forbade the bank to sell LaSalle or make any other decision about its future without shareholder approval.

The decision is a triumph for VEB, a Dutch investor body that brought the case, but a huge setback for Rijkman Groenink, ABN Amro's chief executive.

After the hearing, Peter Paul de Vries, head of VEB, called on ABN Amro's supervisory board to replace Mr Groenink. "Someone else should lead the sale process and, furthermore, in my opinion Mr Groenink is not the person that should lead the company and be its chief executive," Mr de Vries said.

The RBS consortium is today expected to press ahead with plans to launch its €72 billion rival bid for ABN Amro. - ( Financial Timesservice)