Campaigners are taking legal advice after learning that 2,000 bond holders in Bradford & Bingley will not receive any compensation for losses suffered when the bank was nationalised and broken up.

David Blundell, chairman of the Bradford & Bingley Investors’ Action Group, said the decision would hit many ordinary people and pensioners who held what used to be known as Permanent Interest Bearing Shares in B&B.

He said: “This decision is astonishing. It’s an outrage and once again shows small investors have been punished by this Government.”

Mr Blundell said he did not blame independent valuer Peter Clokey, a senior accountant at Pricewaterhouse Coopers, who will also decide whether around one million former B&B shareholders and other bondholders are entitled to compensation.

The PIBS bond holders are mainly pensioners. In total, the 2,000 investors bought £105m. The Government cancelled the coupons last June and the PIBS have since traded at a fraction of their original price.

Bondholders were hoping Mr Clokey would enable them to salvage some value by awarding them compensation, but he has ruled the PIBS were not counted under the terms of the Compensation Scheme Order.

Mr Blundell said the action group was considering a judicial review against the Treasury and was taking legal advice.

The group’s solicitor Charles Fussell has written to Mr Clokey requesting clarification.