Lloyds Banking Group will have to pay the Government a break fee of more than £1bn to withdraw from the state insurance policy for banks’ toxic debts.

The Treasury is demanding payment for the 'implied insurance' provided by the asset protection scheme since an outline agreement was reached in March, according to sources. In the Government’s view, Lloyds and Royal Bank of Scotland were saved from collapse by the APS, into which they agreed to place £585bn of bad loans.

Daily Telegraph