Following intense pressure from the brokers, who generated more than 90% of the bank's 3bn mortgage book, it has agreed to offer all customers the same terms, whether they deal with a broker or directly with the bank.

This means that brokers can now give their clients the same deep discounts that Bank of Scotland already offers to first-time buyers and home owners who switch from other lenders.

"This was the first time that any lender tried to offer different products through different distribution channels, " said Michael Dowling, president of the Independent Mortgage Advisers Federation. "When they heard from the brokers about the implications for their business, they decided it was more appropriate to offer the same products to everybody."

The row erupted as Bank of Scotland is spending 160m to build a national network of 46 branches. With outlets already open in Ballyfermot, Dun Laoghaire, Limerick and Swords, it is to open four more branches over the next four weeks.