Alistair Darling will be keeping a close watch on Monday on the share price of Lloyds Banking Group, as the chancellor seeks to avoid marking this week’s first anniversary of nationalising Northern Rock by taking another bank into public ownership.

The government on Sunday sought to quash speculation that the £10bn loss for 2008 by Lloyds’ subsidiary HBOS, which sent the banking group’s shares down 35 per cent on Friday, could tip the bank over the brink.