BOSSES of the Hampshire Pension Fund last night ruled out following other local authorities in suing Sir Fred Goodwin and the Royal Bank of Scotland.

Cherie Blair, wife of former Prime Minister Tony Blair, has been hired by two councils to battle for compensation after RBS’s share price plummeted.

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Hampshire Pension Fund could have lost as much as £26m due to the plummeting stock, which collapsed from £3.50 last March, when the fund had £27.6m of RBS shares, to just 22p today.

Although just a fraction of the £2.9 billion managed by the fund, it is more than the £23m that has provoked North Yorkshire council, along with Merseyside, to press claims in a US court that RBS “falsely reassured”

investors over its finances.

Councillor Ken Thornber, leader of Hampshire County Council, which manages the fund, said: “We have no plans at the moment to take action against RBS. We are taking a longer term view that share prices will recover.”

The legal firm launching action against RBS UK pension funds said today that it would “relentlessly” pursue the bank and its directors.

Sir Fred, who stepped down as chief executive last November, sparked outrage when details of his £703,000 pension emerged. RBS lost a record £24.1 billion last year.

Hampshire Pension Fund, which is managed by the county council, cares for the retirement income of 46,220 members from 201 employers, including 11 councils in the region, as well as the county’s police and firefighters and those of university workers.

Mrs Blair,who is known as Ms Booth QC in her professional capacity, said: “This is a significant case not only for the massive losses inflicted on local authority pension schemes and other UK institutions who were the largest investors in RBS, but also for the potential to protect investors in the future by significantly raising the standards for good governance in major UK companies.”

The action will cover all those who bought shares between June 26, 2007, and January 19 this year.

During that period RBS asked investors for £12 billion in a rights issue before being forced to call on taxpayer support.

An RBS spokesman declined to comment.