It is believed plans for the scheme will be announced tomorrow barring any last-minute glitches after a week of haggling over the terms of the deal, which seeks to protect banks against losses on their toxic assets.
Lloyds, already 43 per cent owned by the Government, is keen to avoid the state taking a majority stake in payment for the insurance.
GET THE LATEST SHARE PRICES NOW
But to do so, it will have to add high-quality assets into the pot being insured, pay bigger fees or absorb higher losses. All these options could hit shareholder value and have been the subject of intense debate.
It was said yesterday that Lloyds’ chief executive Eric Daniels had “stormed out” of meetings with the Treasury. Insiders said Daniels was fighting hard for shareholders.
The shares rose 2¼p to 47¾p. Analysts said Lloyds needed the scheme because it was facing further big losses this year on the HBOS loan book, which lost £10billion last year.