LONDON (Reuters) - The FSA said it had changed its rules so as to prevent building society mergers from diluting savers' deposit protection.

As a result of the change, building societies that merge will remain separately guaranteed under the Financial Services Compensation Scheme, the government-funded safety net for savers.

The move is aimed at ensuring that depositors with accounts at two merging societies whose combined savings exceed the current 50,000 pound individual compensation limit remain fully protected.

"Following mergers this will help existing savers with the societies who want to keep below the deposit protection limit and also reduce withdrawals from the successor society driven purely by compensation considerations," said FSA Retail Markets Managing Director Jon Pain.

The credit crunch has prompted several mergers between Britain's mutually-owned lenders, including sector leader Nationwide's tie-up with the Derbyshire and Cheshire building societies in September.

(Reporting by Myles Neligan; Editing by David Cowell)