SHAREHOLDERS of the Bank of Scotland have voted overwhelmingly in favour of the proposed £29bn merger with the Halifax.

About 300 shareholders attended an extraordinary general meeting in Edinburgh to give their approval to the deal, which will create the Halifax Bank of Scotland (HBOS).

Sir John Shaw, governor of the Bank of Scotland, said the tie-up would herald "a new chapter" in the Bank of Scotland's 306-year-old history.

He said: "This is a defining moment in the Bank of Scotland's long and successful history, but it is by no means the final chapter."

Halifax shareholders are also expected to give their backing to the deal, which was first announced in May, at a meeting in Sheffield today.

HBOS is expected to open for business and begin trading on September 10