A LEADING British life assurance society has taken what is believed to be a £1 billion sterling "bet" on a stock market crash.

The unnamed company placed the "bet" on the London International Financial Futures Exchange (LIFFE) in a highly complicated transaction involving predictions of where the FT SE index of the Britain's top 100 companies is likely to be next year.

A spokesman for LIFFE said it was believed to be the largest single deal of this type ever on the exchange.

He stressed he was unable to confirm the name of the company or the value of the move, although it is thought that the deal carried a nominal value of £1.1 billion.

If the company is right, it stands to make a profit of about £100 million, the report added. If it is wrong, it could lose up to £500,000.