TAXPAYERS could lose millions in the takeover bid for the developer behind one of the biggest housing schemes in Southampton’s recent history.

Potential bidders eyeing debt-laden Crest Nicholson have warned an exclusivity agreement with a rival buyout firm, which prevents them from making offers, could hit taxpayers.

Crest Nicholson is 90 per cent owned by banks after debt-for-equity swap last year.

Lloyds Banking Group, which is 41 per cent owned by the taxpayer after a £20bn bailout, owns just under one fifth of the housebuilder. An open bidding war would better reward taxpayers by driving up the price.

But rival housebuilders such as Galliford Try, Redrow and Persimmon, who could all mount bids, have been frozen out by an exclusivity agreement with Horizon, the latest acquisition vehicle of Hugh Osmond, the entrepreneur who built up Pizza Express and Punch Taverns.

The agreement is thought to last until the middle of June.

Mr Osmond’s approach, which is thought to value Crest at around £350m, could result in the first big acquisition the housebuilding industry has seen since the start of the recession.

Yet a deal with one of the housbuilders could bring merger savings of between £15m to £20m, according to property insiders, and this could allow for a higher bid price. However the final decision will fall to the lenders, led by Lloyds.

Crest Nicholson has just started work on the £500m Centenary Quay scheme in Woolston. Rising on the site formerly occupied by shipbuilder Vosper Thornycroft, the land is earmarked for 1,620 homes.

Latest accounts show Crest recorded a pre-tax loss of £50.7m up to October 31.

Horizon is flush with cash after raising more than £400m in a stock market listing earlier this year.