BANKING: BAILOUT PLAN: FEDERAL REGULATORS SHORE UP THE BANK OF NEW ENGLAND'S HOLDING COMPANY IN A RESCUE OPERATION THAT COULD COST TAXPAYERS $2.3 BILLION.Federal regulators ended the Bank of New England's yearlong struggle to survive the region's real estate slump and began a government bail-out that could ultimately cost $2.3 billion.

The Federal Deposit Insurance Corp. on Sunday night took over the holding company's three banks in Massachusetts, Connecticut and Maine. It transferred their assets and deposits into newly created government-owned institutions known as "bridge banks."Regulators pumped $750 million from the insurance fund into the banks and were negotiating to sell them soon with additional government assistance, said FDIC Chairman L. William Seidman.

"We have two active bidders and other qualified bidders might apply," he told reporters, declining to elaborate.

Seidman estimated the final cost of the bailout at $2.3 billion. He said it was unclear whether the cost ultimately would be greater than the most expensive so far, the 1988 rescue of First RepublicBank Corp. in Dallas. That has been estimated at $2.9 billion, but Seidman said it could be less pending a final accounting.

All of the offices of Bank of New England's three subsidiary banks - Bank of New England, Boston; Connecticut Bank and Trust Co., Hartford; and Maine National Bank, Portland - were opening Monday.

"As far as customers and depositors are concerned, it's business as usual," Seidman said.

Even customers with deposits greater than the $100,000 insurance limit will have full access to their accounts. That step was taken to protect the shell-shocked New England financial system.

Like the Texas banks before it, Bank of New England Corp. suffered from huge loan losses as commercial real estate values in its region plummeted. More than a third of its $6.3 billion in real estate loans were in default.

"We did the best we could . . . but in the end our progress was simply overtaken by the economy and the New England real estate market," Lawrence Fish, chairman of the holding company, said in Boston. "While this is a sad day for this institution, it is also a new beginning."

The government asked Fish and the holding company's other managers to stay on. They took over the institution a year ago, after the previous management was forced to resign, and have been trying to keep Bank of New England afloat by selling off its assets.