Christmas came early for dozens of pensioners yesterday when the Halifax bank pledged to pay back everyone who lost their life savings in a £10m swindle.

Bank bosses even put festive icing on the cake by promising to pay interest to all 84 investors who lost out in complex fraud.

The dramatic U-turn came only weeks after gambling mad, former financial consultant Graham Price was jailed at Swansea Crown court for 12 years.

Price, 58, of Llamsamlet, Swansea, south Wales, ran a Halifax bank agency in nearby Gowerton.

Known as ''Mr Halifax'' to hundreds of customers, he also ran a separate investment arm which he used to fleece dozens of unwitting victims.

His elaborate scam was uncovered when the Halifax carried out an unannounced audit at the branch and found an IOU for £7m in the branch safe.

He was arrested soon after, in November 2004, and it was discovered he had swindled his way to a total of £10m, including £7m from the Halifax and £3.3m from private investors.

He was jailed earlier this month after admitting 43 charges of theft and fraud and asking for 263 similar charges to be taken into account.

But it emerged that the Halifax bank was seeking to get cash back from the private investors.

It claimed Price had stolen cash from the bank to pay out investors as part of his complex fraud.

Now the Halifax bank has announced that it will no longer be pursuing any of the victims for cash that it lost and will fully reimburse everybody involved.

It will cost the bank up to £2m.

Mark Hemmingway, a spokesman for Halifax, said: ''Hopefully this will put an end to all the stress and the problems that have been caused.

''What we are trying to do is put people back to the position they were in before they handed over any money to Price.

''Many of those who lost out because of him were not customers of the Halifax at all, but we feel a moral responsibility to put matters right.

''It came out in the court case that he was known as 'Mr Halifax' and there was a Halifax sign above the door to his office.''

He added: ''What we are doing is giving people back what they handed over to Price, plus a five per cent interest payment for the time the money was with him."

Fraud victim Barry Mills, 53, of Teignmouth, in Devon, said he was absolutely knocked out by the sudden gesture.

''After losing £125,000 to Price and being pursued by the Halifax for a further £63,000 there was very little Christmas cheer around.

''I still can't believe this - it seems unreal."