Gordon Brown yesterday insisted that the proposed merger of Lloyds TSB and HBOS was the right step to 'save the banks' since no other bidders had come forward with better offers.

The prime minister’s renewed approval for the tie-up – arranged before both banks agreed to a government capital injection – comes in spite of increasing pressure, particularly in Scotland, to let HBOS keep its independence.

'It’s the better solution because it’s obvious that there is no other group of people who have yet come along,' Mr Brown told the BBC. 'The better solution is for [HBOS] to go with what is a very strong bank – Lloyds TSB.'

Financial Times