The British Treasury today announced another multi-billion pound injection of public cash into the beleaguered Lloyds Banking Group.
The British government is to insure £260 billion of the bank’s potentially “toxic” assets.
In return the taxpayer will up its ownership of the bank from 43 per cent to 65 per cent - or 77 per cent including non-voting shares.
Lloyds Banking Group has also pledged to lend an additional £28 billion over the next two years as part of the deal.
The Government's fee for limiting Lloyds' losses from £260 billion of potentially bad assets totals £15.6 billion.
Alongside taking extra shares and obtaining the commitment to lend to businesses and individuals, the Treasury will also upgrade £4 billion of the non-voting shares it already holds.
Lloyds Banking Group was the FTSE 100 Index's leading riser yesterday amid hopes that a deal was close to limit its potential losses.
The company was forced to ask for further support because of the heavy losses run up by HBOS — which it took over to prevent its collapse.
The news means that the taxpayer has a controlling interest in another bank.
The British government has already struck a similar agreement with Royal Bank of Scotland.
RBS - which last week posted a UK record loss of £24.1 billion - has agreed a similar deal to place £325 billion of
riskier assets such as commercial property loans and mortgage-backed securities into the scheme.