The Bank of Ireland could face renewed legal action from a campaign which represents about 2,000 British pensioners at threat of having 46 million pounds' worth of their bonds confiscated, the Independent reported on Wednesday.

Michael Noonan, Ireland's finance minister, said last week that the 2,000 retail investors who own permanent interest bearing shares (Pibs), had until 5.30 pm on Wednesday to react to a proposal to wipe the bonds out in a bid to help the bank raise 4.2 billion euros (3.5 billion pounds) in capital, according to the article.

Bond expert Mark Taber, the campaign's organiser, has contacted around 500 pensioners, urging them to complain to Noonan before this deadline is up, the newspaper said.

In the event Noonan does not take their pleas into account and cancels the Pibs, the campaign has asked law firm Brown Rudnick to challenge the government in the Irish courts or to sue the Bank of Ireland in the UK.

The focus at the moment is to persuade them not do this, but if the worst happens we will be looking at legal action. Most of the holders of these bonds are very elderly and wouldn't necessarily be aware that this is even going on, Taber was quoted as saying.

The shares carry an interest rate of 13.75 percent and were issued by savings company Bristol & West, which was acquired by Bank of Ireland in 1997. The crisis-hit Irish lender is now trying to buy those legacy shares back at a fraction of their face value as it restructures its shattered balance sheet.

British pensioner Albert Kempster, 73, took on Bank of Ireland in court in June in a bid to prevent his savings, much of which were tied up in Pibs, from being wiped out by the Irish bank's debt restructuring.

(Reporting by Michelle Martin; Editing by Kavita Chandran)