Standard Life's 2.3 million policyholders would be better off if the life assurer demutualised, says Mr Fred Woollard the Australian policyholder. He is leading the challenge to convert the mutual society into a publicly quoted company.

But Standard Life contends that while some large policyholders, including Mr Woollard, could make significant gains should the mutual become a publicly quoted company, most would lose out because it would have to pay dividends to shareholders.

Mr Woollard told The Irish Times that qualifying Standard Life policyholders would on average receive "free" shares worth £6,000 sterling (€9,976) each on demutalisation. His figures are based on his £15 billion sterling valuation of Standard Life.

The mutual disputes this level of payout. It quotes a median payout of £2,500 sterling - this means 50 per cent of policyholders would get more than £2,500 but 50 per cent would get less.

According to Standard Life's estimates, at Mr Woollard's £15 billion valuation some 22 per cent of its policyholders would get payouts of £250 to £1,000 while 0.2 per cent would get £100,000 or more.

Mr Woollard argues that it is in the mutual's interests to put as low a figure as possible on the payout. Standard Life says his average figure deflects attention from the very small payment members with small policies or more recent policies would receive and the very large payments to only a few policyholders.

Standard Life has about 100,000 Irish policyholders of whom 65,000 would qualify for payouts on demutualisation. But a spokesman said that about 40,000 of these policyholders would only get the minimum payment because they took out small policies over the past two years. The mutual is basing its calculations on a minimum payout of £250 sterling while Mr Woollard is calling for a minimum of £500.

Mr Woollard does not dispute that he stands to make a profit of about £150,000 sterling if the demutualisation goes ahead - he became a policyholder by acquiring several second hand endowment policies in the market. But he will not discuss his potential profit other than to say "it would be a lot less than the £350,000 that Standard Life management pay themselves as salary each year". He insists he is not in line to get commission or a success fee payment if his campaign succeeds. And he says he has a major interest in ensuring that the mutual does well - his own policies mature between 2001 and 2016.

"Every proposal has its pluses and minuses. But the pluses of demutualisation in this case substantially outweigh any possible negatives," he said.

He accepted the need to pay dividends to shareholders would reduce the surrender or maturity value of members' policies. But he insisted that even with this reduced surrender value, the combination of the surrender payment on policies and value of the "free" shares which members would get on demutualisation would, in all cases, more than compensate for this fall in value.

But Standard Life insists "there is no such thing as a free meal". Demutualisation, it says, would mean once-off payments to policyholders but it would mean the value of their savings and pension policies would fall because about 10 per cent of the annual earnings which currently go into policymakers' funds would have to be diverted to pay dividends to shareholders.