EMBATTLED Deutsche Morgan Grenfell was preparing yesterday to launch an intensive campaign to shore up its pension fund business as former fund manager, Ms Nicola Horlick, continued to argue that she had done nothing wrong.

The investment banking arm of Germany's mighty Deutsche Bank is to meet key clients, but DMG spokesman, Mr James Murray, denied pension firms were considering moving from its £18 billion funds.

"We've had absolutely no indication that our institutional pension fund clients have plans at this stage to move their business," he said.

Morgan Grenfell Asset Management (MGAM), the fund management arm of DMG, has already written to all its pension fund clients to limit any fall out from the suspension and later resignation last week of senior British fund manager Ms Horlick.

Some clients, including London's Westminster City Council Scotland's Dumfries and Galloway County Council and the Merchant Navy Officers' Pension Fund, have expressed concern about recent events at MGAM.

And the Railway Pension Trustee Company, which has £1.25 billion with MGAM, said it had met MGAM officials and would be in close contact with its asset managers.

MGAM is still trying to regain an even keel after last year's revelations of irregularities at three of its retail investment funds, the sacking of fund manager Mr Peter Young, a £180 million cash injection to bolster the funds and the announcement of a £200 million compensation package.

Mr Young, who denies any involvement in criminal activity, is now under investigation by Britain's Serious Fraud Office (SFO).

Ms Horlick was suspended for allegedly trying to lure staff with her to another firm, only days after she had been promoted to managing director at MGAM.

She subsequently resigned as head of MGAM's British pension fund business and made a dramatic dash to Frankfurt on Friday to plead with Deutsche Bank for her reinstatement.

Many British papers carried pictures of the 35 year old - dubbed Superwoman - with her children at their luxury home in Kensington, west London.

Fund management sources said Ms Horlick, who said she managed £3.5 billion-£4 billion of the firm's business, had talked about a management buy out.

But they said that even if this had been discussed informally it would have had no hope of success as DMG, along with many other firms, was keen to build its strength in this lucrative area and would not dismantle its business.

Ms Horlick, who during a whirlwind campaign on Friday entered MGAM's London headquarters in an attempt to meet management and loudly proclaimed "Justice will be done", has said she wants to settle her differences as quickly as possible and is pinning her hopes on further talks with a Deutsche legal official.

She has said she plans legal action over what she claims was her "constructive dismissal" by the firm. But banking sources said it had not yet been served with any legal papers.

Ms Horlick's spokesman distanced her from reports that a December lunch meeting had marked the start of talks with Dutch bank ABN AMRO on a move there.

He said it had been a personal engagement and "there was nothing culpable about meeting a friend...for lunch".

ABN AMRO has denied it tried to poach any MGAM staff.