The City rumour mill suggests that Lloyds Banking Group is looking to raise around £15 billion from a rights issue. This would be in order to be outside of the government’s asset protection scheme entirely.

It is believed that the FSA is aware of such a plan and is currently examining it. Such a rights issue would be the largest in UK corporate history.

To achieve the right level of capital required to withdraw from the government’s insurance scheme, the part-nationalised lender would need to raise around £25 billion, with the further £10 billion coming from asset disposals.

The government currently holds a 43.5% stake in Lloyds Banking Group.