The Co-operative Bank had revealed its rescue plan to plug the £1.5 billion ($2.35 billion) hole in its balance sheet, which lead to an earlier credit ratings agency downgrade.
The rescue funding will be achieved by using a so-called 'bail-in' process, where current bond holders will be offered shares in the UK bank.
In April, the bank pulled out of the Project Verde plan to buy 632 bank branches from Lloyds Banking Group. Lloyds was selling them as part of the deal agreed when it was bailed out by the UK government.
Two weeks later the ratings agency Moody's downgraded the Co-op's debt to junk status, warning the bank may need "external support" if it could not strengthen its balance sheet.
The bank has said the new plan means both investors and the group itself would make a joint contribution to the bank's recapitalisation programme.
Bond holders are likely to lose out in the short term but there will be no external help from the government as part of the plan.
By Tony Aynsley