UK banks pin Brexit hopes on financial crisis bailout negotiator

* Financial services body to lobby for EU access in tradetalks

* Getting banks to speak with one voice seen as biggestchallenge

* Vadera's personality as issue for some, an asset forothers

By Andrew MacAskill and Huw Jones

LONDON, Aug 4 (Reuters) - In early October 2008, thenBusiness Minister Shriti Vadera called a secret meeting ofbankers and government officials on the top floor of StandardChartered's City of London headquarters to address Britain'sbiggest peacetime crisis.

The collapse of Lehman Brothers two weeks earlier -the biggest bankruptcy in history - had caused UK credit marketsto seize up and pushed some of Britain's biggest high streetlenders, including Royal Bank of Scotland and HBOS, to the brinkof implosion.

Vadera told the meeting that if they did not quickly come upwith a bold plan the economy was on the verge of collapse,according to two people present at the gathering.

The strategy she came up with is credited by some as drivingthen Prime Minister Gordon Brown's subsequent bank bailout plan,burnishing her credentials for her latest role - representingmajor banks as Britain negotiates to leave the European Union.

"She was one of the most important people in the banks'rescue," said a person who spent months working on the bailout.

"Throughout the whole process she made people do things thatthey didn't want to do: the banks, the Treasury, the Bank ofEngland. She is a force of nature."

Vadera, a former investment banker, is now chairwoman ofSantander UK and is being called upon to protect the banksagain, this time as chair of the new lobby.

Britons' vote to leave the European Union spells years ofuncertainty for the UK financial industry, which accounts forabout 12 percent of economic output and is the biggest generatorof taxes.

It is an upheaval that threatens London's dominance ofglobal finance.

The group led by Oxford-educated Vadera will push thegovernment to retain as much access to Europe's single market aspossible as it renegotiates Britain's relationship with theother 27 members of the bloc.

EU leaders have made clear market access is impossibleunless a country also allows EU citizens the right to work inBritian, something the banks would welcome but which many ofthose who voted in June to leave the bloc reject.

That puts an industry scorned by Britons since the financialcrisis on a collision course with large swaths of the public whoreject the EU partly because of fears about immigration.

People who have worked with Vadera say her directness ispart of her appeal, although her style can be abrasive.

Two of them said former finance minister Alistair Darlingonce had her locked her out of a meeting during the financialcrisis after she was rude to one of his officials.

"She appears to believe that unless there is blood on thecarpet, preferably that of her own colleagues, then she has notdone her job," Darling said of her in his memoirs.

Vadera declined to comment for this story.

TASK FORCE

Her supporters say she has what it takes to forge consensusbetween the new government, divided between eurosceptics andsupporters of the EU, and the disparate views of Britain'sfinancial sector of banks, insurers, brokers and asset managers.

"This is something that needs both knowledge of Europe andgovernment and has to be done with energy, with directness,"HSBC Chairman Douglas Flint told Reuters in the first publiccomments by a member of the group. "We need to drive quicklywhat's really important and it takes leadership that combinesboth intellect and a bit of vigour."

The task force comprises about a dozen top names from thefinancial district, including Royal Bank of Scotland ChairmanHoward Davies, insurer Aviva's chairman Adrian Montague, AllianzGlobal Investors' vice chair Liz Corley, and Barclays chairmanJohn McFarlane.

From an office in London's Mayfair district, it will offeradvice to the Treasury, as well the newly created ministries ofthe Department for Exiting the European Union and InternationalTrade in their negotiations over leaving the EU.

Some of its thinking is already emerging.

This includes appealing to large companies in continentalEurope to make the case for Britain's continued access to thesingle market, perhaps coupled with continuing to contribute tothe EU budget after it has formally left the bloc.

"There won't be a single view but we are making sure thateveryone understands the key issues, what's important and whatwe are fighting for," Flint said.

While Prime Minister Theresa May will be mindful of the taxrevenue financial services generate, other industrial sectorswill be vying for her attention as well.

HERDING CATS?

Vadera's reputation could work against her as well as in herfavour.

The same two people who worked with her said she was knownas "Shriti the Shriek" by government officials for her abilityto reduce junior staff to tears when she worked as a ministerand protégé of former Prime Minister Gordon Brown.

A friend said that while she can be difficult, some of herpublic portrayal comes with an element of misogyny.

"She is strong minded and strong willed, but with men thatis often seen as a virtue," the person said.

Born in Uganda, she was brought up in India and Britainafter the dictator Idi Amin expelled her family.

Days before the referendum, Vadera wrote a column afterlawmaker Jo Cox was killed about the benefits of EU membership.

She said Britain's long history of internationalism is asource of its economic strength and was grateful that as astateless child she could become a British citizen.

"I love the Britain that can nurture immigrants like me andmake them its own," Vadera said.

Vadera's task force, whose full name is the FinancialServices EU Task Force, won't have the field to itself.

The Financial Services Negotiation Forum also aims to bendthe government's ear in trade talks, styling itself more as agrassroots body led by City veterans that wants to give smallerfinancial firms in London and beyond a voice as well, which willinevitably mean differing priorities.

An executive at one bank, who worked on the rescue of theBritish banks during bailout, said he was skeptical that even atask force backed by top lenders will have much success in asector known for the aggressive pursuit of self-interest.

"I don't think the task force will have much force or manytasks," he said. "Everyone will just pursue their own agenda."

He did, though, say Vadera is the best person for the role.

He remembers her berating the bank CEOs who didn't want toaccept taxpayer money during the financial crash and urgingofficials from the Treasury to get on with the bailout.

"She is the most organised, capable person I can think offor this job," he said. "She is a very hard woman to say no to."

(Reporting By Andrew MacAskill and Huw Jones; editing byPhilippa Fletcher)