Equitable Life has moved a step closer to a possible sale after announcing today it would be prepared to listen to approaches for the business.

The mutual life insurer said it was "at a crossroads" following the £1.7 billion transfer of its with-profits annuity book to Prudential last year, adding that 2008 was likely to be a "key year" in deciding the society's longer term future.

It said it was inviting other companies to say what they could do to improve the prospects for policyholders, but it stressed that it remained stable and secure and could continue running its existing policies to maturity.

The group declined to name the companies it was planning to hold talks with, but they are likely to include Pearl, which specialises in buying up closed with-profits funds.

Equitable is now in a better position to be taken over by a third party, following the transfer of its with-profits annuities to Prudential, as it is thought potential buyers may previously have been put off by having to manage the complex products.

The society also transferred its £4.6 billion non-profit annuity book to Canada Life in February last year.

Chairman Vanni Treves said: "The major achievements of the last 12 months have brought the society to an important crossroads. We can comfortably run the business off ourselves, but we are also in good shape for others to consider.

"If one or more third parties can provide a better outlook for our policyholders than we can ourselves then we will recommend the best approach to our members.

"Whatever the outcome, the next 12 months is the right time to address this question."

Mr Treves previously said the society had received a number of informal approaches about a sale.

The group's results for 2007, which were published today, showed that its with-profits fund was valued at £6.8 billion at the end of December, while it had excess realistic assets, a key measure of its solvency, of £621 million, representing 9.2% of the fund.

It said bonus rates of 5% for with-profits pensions policies and 4% for life ones would be maintained for 2007, with bonuses also likely to be at this level for 2008.

The majority of the with-profits fund continues to be invested in fixed income investments, with only around 20% of assets in equities and property.

Equitable was brought to its knees in 2000 when it lost a legal battle in the House of Lords over the rights of its policyholders, forcing it to close to new business.

Policyholders at the group are still waiting for a report by the Parliamentary Ombudsman to see if they are entitled to Government compensation over its role as regulator in handling the crisis.