HBOS said shareholders bought just 8.29 per cent of the heavily discounted stock offered under the scheme to help bolster the group's balance sheet.

It potentially saddles the rights issue's underwriters, Morgan Stanley and Dresdner, with more than £3.6bn worth of the new shares.

The investment banks have the next two days to try to sell the stock for more than the 275p offer price, but with HBOS shares more than two per cent down today at or just under the 275p level, investor appetite may be limited.

The low take-up makes the issue one of the worst corporate fundraising outcomes since BP tried to raise £7bn immediately after the stock market crash of 1987, when around 95 per cent of stock ended up with underwriters.

HBOS's rights issue was launched back in April when the bank's share price was around the 500p mark. Shareholders were offered two shares at the knock-down price of 275p for every five held.

But since then the stock has plunged in value amid fears of further big write-downs in the sector and general economic gloom, severely dampening the appetite of investors to buy the new shares.

Shares in HBOS, which is Britain's biggest mortgage lender, went on to fall below the discounted rights issue price on several occasions ahead of last Friday's take-up deadline.

Most of the group's estimated two million smaller investors, who were created when the Halifax Building Society demutualised in 1997 and own more than a quarter of the shares, turned their backs on the cash call.

Richard Hunter, head of UK equities at Hargreaves Lansdown, said: "I don't think the eight per cent figure is in the least bit surprising given the share price has been under water for virtually the whole of the period leading up to the deadline on Friday."

He added: "It might call into question rights issues more generally.

"HBOS had to go through eight weeks when it was exposed to the market - in other countries the time frame is much much shorter."

HBOS will still get its hands on the £4bn as part of the underwriting deal with Morgan Stanley and Dresdner.

The investment banks' exposure could be limited after reportedly lining up a number of interested institutions during a roadshow for potential investors in the weeks leading up to Friday's close.

HBOS spokesman Shane O'Riordain said the group had been realistic about the prospects for the rights issue take-up.

He said: "(It) has been conducted in the middle of a fierce financial storm. We have seen unprecedented volatility in banking stocks."

But he added: "The bottom line is that we have raised £4bn of capital.

"Just like ships need more ballast in heavy seas, banks need more capital in tougher times. We have now raised that capital."

Mr O'Riordain said the bank would now have one of the strongest balance sheets of any bank in Europe thanks to the fundraising.

He added: "From our perspective, the key advantage of a rights issue is that all shareholders are treated in exactly the same way."

HBOS's eight per cent take-up rate is less than half the 19 per cent achieved by Barclays for its £4.5bn share placing last week.

Barclays, whose share price has also been buffeted during recent stock market turmoil, said a series of wealthy Asian and Middle Eastern investment groups picked up the remainder of the shares.

Britain's major banks have had to ask shareholders for more money to bolster their finances after suffering some hefty writedowns thanks to the credit crunch. Last month HBOS said it had written off more than £1bn this year.

Royal Bank of Scotland raised £12bn earlier this year, also through a rights issue. It was backed by more than 95 per cent of investors, but unlike HBOS, RBS's shares remained comfortably above the discounted issue price.