Troubled life insurer Equitable Life was set to go to the High Court on Monday to win approval for a plan to end its financial crisis.

Equitable Life, which because of long-standing payout commitments was left facing a �1.5bn shortfall, has proposed a compromise deal to meet pledges, while offering other savers a 'fair' deal.

Under the proposal, savers of policies with guaranteed annuity rates (GARs) would have their policy values increased by 17.5% in return for waiving their right to guarantees.

Holders of non-GAR policies would receive an increase of 2.5%, as long as they agree not to sue Equitable over mis-selling.

Dispute

However, some policyholders have objected to the GAR and non-GAR distinction, saying that it fails to accommodate groups with-profits annuitants and international policyholders.

They believe that these groups should be taken into account under different terms than the non-GAR and GAR distinction, as outlined within the compromise.

The dispute threatens to derail Equitable's plans to settle its long-standing funding row, and win a �150m cheque from Halifax bank.

In an effort to raise cash to close its funding gap, Equitable sold operational assets to Halifax earlier this year.

Halifax must by March push through its compromise deal, which requires approval from the High Court and policyholders, if it is to earn the Halifax bonus.