Standard Life policy holders are expected to overwhelmingly reject the demutualisation of the life assurer.

While the outcome of the vote will only be revealed today, Standard Life sources are indicating the number of votes cast in favour of changing the status to a publicly quoted company has fallen well short of the 75 per cent necessary to trigger windfall gains of free shares for eligible members.

The results will be revealed at an extraordinary general meeting today and will be a blow to the so-called carpetbaggers who bought Standard Life policies with a view to benefiting from free shares in the short-term.

An estimated 1.1 million of Standard Life's 2.3 million with-profits policyholders voted. Standard Life has 150,000 Irish policies, with about 70,000 in line for pay-outs under a demutualisation.

Between 500 and 2,000 policyholders are expected to attend the meeting but their votes are not expected to swing the decision one way or another. The vote was forced by Australian fund manager Mr Fred Woollard.

If the demutualisation had been approved, Mr Woollard told members it would have triggered average windfall payments for Standard Life members of around £6,000 sterling (£7,500) as the 175-year-old financial services giant stormed into Britain's FTSE 100 index with a market capitalisation of between £13 and £18 billion sterling (£16.4 and £22.6 billion).

Standard Life's board was confident of victory, with reports in the Financial Times stating Mr Woollard may even fail to get the support of 50 per cent of its members for a change in status.

Analysts said whatever the outcome there would be far-reaching implications for Britain's mutual organisations which would be forced to pay more attention to their members. Mr Mikir Shah, insurance analyst at Robert Fleming in London, said the carpetbagging mentality among policyholders - taking the short-term cash rather than banking on better long-term rewards - would not disappear even if Mr Woollard's attempt failed.

The Australian, who stands to make some £150,000 sterling from a flotation, has said all along he will respect the outcome of the vote and will end his campaign if he gains less than 50 percent of the votes. But Mr Shah said Standard Life needed to strengthen its defences against attacks from other quarters by bolstering the image of the principle of mutuality in financial services.

Standard Life may have spent £10 million sterling on its defensive campaign in the last few months, he added, but prior to that it had failed to impress the longer-term benefits of mutuality on policyholders.

Enemies of demutualisation argue that the need to provide steady shareholder returns would damage the company's aggressive strategy in the UK market.

Another analyst said it was only Standard Life's deep-seated commitment to mutuality which gave it a chance in the vote.

Britain has seen a string of demutualisations of building societies and mutuals in the last few years, showering members with billions of pounds in windfall cash.

Nationwide Building Society won a surprise victory against demutualisation two years ago, but smaller rival Bradford & Bingley plans to float in December if it wins a conversion vote on July 17th.

Should Mr Woollard win a simple majority of more than 50 per cent but fall short of the 75 per cent hurdle, the demutualisation debate looks set to run on.