Standard Life, one of the large institutional investors in Lloyds TSB, appeared to have thrown its support behind the rescue takeover of HBOS after concerns that the terms of the deal may have to be renegotiated.

Shares in HBOS yesterday rose 31.8p, or 27.3%, to close at 148.1p after Gordon Brown, the prime minister, said he expected the rescue deal to be completed.

People familiar with the situation said that Standard Life, the Edinburgh-based life assurer, had indicated that it would back the transaction.

However, shares in Lloyds TSB also rose, adding 23.5p, or 10.4%, to 250p. That means HBOS is still trading at a discount to Lloyd TSB’s offer price.

Financial Times, The Times