Each had a BlackBerry hand-held computer.

‘They were looking at the screens with obsessive interest as if they were waiting for something huge to happen,’ said a member of staff.

And, of course, they were. News of the impending collapse of the world’s fourth biggest investment bank was filtering through from New York.

But not everyone was a loser, and some of the ‘winners’ were sitting around that table at Le Caprice.

The restaurant is in the heart of Mayfair, which itself is at the heart of the hedge-fund industry. The men with the BlackBerrys are part of this exclusive club.

Unlike almost everyone else, they wanted Lehmans to crash; hence, the febrile atmosphere around their table. By the time they had drunk their last bottle of bubbly they knew they were about to make a killing.

For hedge funds, and the people who control them, specialise is an activity called short-selling.

In other words, if it goes down, you make money – the very inverse, both practically and morally of normal share trading. In the case of the behemoth of Lehman Brothers, the profits from ‘shorting’ raids in recent days has run into millions of pounds.

Some say those who make money in this way are performing a vital safety valve function. More, however, compare them to ‘financial vultures’.

Either way, they bring to mind Gordon Gecko, the fictional financier of the 1987 film Wall Street whose mantra of ‘Greed is Good’ captured the rapacious mood of the boom years of that decade.

One message on a share-trading chatroom bulletin board read: ‘We are never going to be able to do without oil and gas, but we can do without hedge-fund managers… let’s do away with short-selling.’

The anonymous author added: ‘The City was mayhem [on Monday night after the collapse of Lehmans]. Never been so much champagne drunk.’

Now, of course, a lot of it was being sunk by Lehman employees who had just lost their jobs and their careers and were drowning their sorrows.

At Smollensky’s wine bar, just a short distance from the the bank’s Canary Wharf headquarters, former staff were throwing back £65 bottles of Veuve Cliquot and Moet with Sambuca shots. But there was anger as well as despair at the short-selling traders who were cashing in on Lehman’s miseries.

Another (now ‘ex’) trader in his 30s added: ‘Some of the hedge fund traders have been spreading false rumours that clients had stopped dealing with Lehmans to drive the price down.’

Now, of course, hedge fund traders were not responsible for the banking crisis, which could spark a cull of tens of thousands of jobs across the financial sector and drive Britain deep into recession.

Yet many ordinary people who live in the real world – whose pensions and savings will be adversely affected in the aftermath of Meltdown Monday – might find their behaviour hard to stomach.

The deal, which would create a retail banking giant would end the uncertainty about the strength of HBOS following the calamitous run on its shares.

Under the deal, the valuation of HBOS shares would be closer to its closing price last week of 300 pence rather than its current level of around 100p.

News came as shares in the firm slumped as much as 56% on the London market.

HBOS’s shares had rallied in earlier trade, but the recovery quickly fizzled out.
Other UK banks also suffered from the loss of confidence in the sector after the crisis on Wall Street.
Royal Bank of Scotland fell 18%, Bradford & Bingley sank 11.7% and Lloyds TSB dropped 7%.

likely that govt would want it to happen though