Co-op Bank has been able to cross a major obstacle in its efforts to fill a finance gap after it received an approval from its bondholders for its recapitalisation plan.

The bank needs £1.5 billion to fill the gap in its finances and the management is also considering cutting or cancelling income paid to the bond holders of the bank. Sutherland, the chief executive of the Co-op Group has urged for support of the bank plan to revive the organisation, saying that it represents the best interest of the stakeholders. Under the plan, bondholders will provide £500 million of capital for revival of the bank. The group reported loss of £709 million, mainly due to a loss of £559 million in the banking arm that is facing £496 million bad debt charge.

It is believed that the under the terms of the deal, the bank's creditors including hedge fund, will take up about 70 per cent of the shares in the bank. Some say that the bank might cut around 1,000 jobs at its branches as some of the branches might be closed.

"The Co-operative Group and the Co-operative Bank are delighted at the overwhelming levels of support for the liability management exercise at this critical juncture, and we would like to thank all our bondholders and preference shareholders for backing the recapitalisation plan. We are now highly confident that our £1.5 billion Recapitalisation Plan for The Co-operative Bank can be achieved," the bank said.