Realtor Mr. Gibbons -- who has threatened to resign his portfolio if Government approves the creation of real estate group Bermuda Home -- made the call as the Finance Ministry said the merger appeared to be legally acceptable.

And another realtor, former United Bermuda Party candidate Mr. A.E. (Ted) Gauntlett, has claimed in a letter to The Royal Gazette that the merger creates a "patently obvious conflict of interest''.

The merger announced earlier this month would see the Bank of Bermuda and L.P.

Gutteridge spin off their deposit companies and real estate divisions into the new company, which would have up to 50 percent of the mortgage market.

Finance Minister the Hon. David Saul said yesterday the Attorney General and the Bermuda Monetary Authority had said the merger of the subsidiaries into a $470 million company was legal.

"It looks like everything is acceptable, legally. It's now a question of how things are administratively,'' he said. "The company hasn't been set up yet.

It's still in the planning stage and we are just keeping a watching brief on developments.'' In addressing the concerns expressed by realtors, the Minister seemed mystified by that concern.

"What do people want,'' he asked. "There have been many companies that have been both deposit companies and real estate companies. They're not unheard of.

"It's a question of what's in the best interest of the community. Will it lead to better service? Will mortgage money be more readily available? Will it be good for the community as a whole? "I don't think that any companies will suffer as a result of this move.'' He also dismissed concerns that other mortgage companies would have to follow Bermuda Home's lead on setting interest rates and lending policies.

Mr. Gibbons said he has received support for his position against the new company.

"I have had a considerable amount of feedback from people who are concerned about this issue. They include a lot of depositors in the two companies and influential people whom I respect.

"I have a responsibility to my voters in Smith's North. I intend to fulfil that obligation, and when I can't do that, I will have to move on. I have a responsibility to the Premier and to Cabinet, but I also have a responsibility to my family. That's why I say that if the merger affects my business, and I believe that it will, I will have to spend more time on my business, and step down from Cabinet.

"In terms of the overall issue, I've always been concerned about deposit taking companies and real estate companies under one umbrella. Banks cannot be in the real estate business in other jurisdictions.'' Mr. Gauntlett said: "There is clearly a patently obvious conflict of interest as a result of the overwhelming temptations to facilitate a real estate transaction with the lending arm of the company, owing to the substantial fees that can be generated thereby.'' But Dr. Saul said it was unlikely that existing companies will seriously be affected by the scheme.

Mr. Gauntlett said: "I respectfully beg to differ with the Minister of Finance. I think he's totally out of touch with the realities of the situation.'' Mr. Gauntlett, a realtor and a Fellow of the Royal Institution of Chartered Surveyors, whose Park Street firm acts as estate agents, appraisers, and surveyors, is a party to the legal action taken out against the Finance Minister by realtors.

The suit is against the decision by Government to allow the Banks to operate real estate offices.

Mr. Gauntlett outlines in his letter five cases where the close liaison between the money lender and the realtor created a conflict of interest.

When contacted yesterday, he admitted to being privy to more than one case where such conflicts arose.

His letter reads: "Small real estate practices have had to tolerate blatant abuses of lending institutions' power in this regard for decades owing to the Minister for Finance each year approving the grant of licences to the bank.

"These unfortunate conflicts of interest serve to drastically erode competitive fair business practices such as to be clearly contrary to the best interests of the public good.

"Unfortunately the Honourable Minister seems incapable of seeing these conflicts of interest, so obvious to everyone else, nor does the Chairman of the Bermuda Monetary Authority, or presumably the Attorney General himself, in view of his continuous endorsement of the Bank's application in the past without objection.'' Mr. Gauntlett called for a Monopolies Commission to independently study such proposals, and failing that he said "...the proposed merger should not otherwise be allowed to take place'' until the lawsuit brought by realtors against the Finance Minister is resolved.