One of the biggest shareholders in Caisse d'Epargne, the French banking group planning a merger with rival Banque Populaire, has issued it with an ultimatum which threatens to derail the €25bn ($30.6bn) deal.

Francis Mayer, director general of La Caisse des Dépôts et Consignations, the former French treasury management division and a 35% shareholder in La Caisse d'Epargne, wrote to group chairman Charles Milhaud at the weekend to underline its continued hostility to the deal and to urge him to reconsider.