Babcock & Brown Limited is expected to suspend its shares from trading this morning, after bankers continued to mull over a last-ditch proposal to save the stricken investment manager.

The suspension is expected to last well into next week, providing Babcock's bankers ample time to consider a restructure plan under which part of the group's $3.1 billion corporate debt would be swapped into an equity stake.

Sources close to the 25-strong banking syndicate said a final decision may not be made until the middle of next week.

The Age