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Speaking at the Building Societies' Association's annual lunch John Goodfellow, chairman of the BSA, said it was unfair the sector had paid to bail out failed banks, which included those that had been former societies.

He said: "I do not want to gloat on the difficulties faced by those institutions. Building societies themselves have faced their own issues in the second half of this year.

"What is notable, however, is the building society sector has looked after its own so far. There has been no requirement for any government bailout of the building society sector; rather difficulties have been dealt with within the sector.

"At the same time, however, societies have been called upon to pay a significant share of the cost of bailing out failed institutions in the banking sector."

Mr Goodfellow said the cost of the bail out had meant building societies had been restricted in their ability to pass on the base rate reduction.

He said: "For all societies, however, there are a range of issues to be considered when looking at the structure of interest rates, these factors will affect each society differently."

Darren Pescod, managing director of Cambridgeshire-based intermediary The Mortgage Broker, said he could understand the BSA's frustration with having to cough up cash to support a rival business model.

He said: "Any business that is penalised for anything that is not their fault, you would be peeved if you had to pay for it, without a doubt."

Bradford & Bingley Building Society demutualised in 2000 while Northern Rock Building Society demutualised in 1997.

The BSA represents all 59 building societies in the UK.