The news came as Skipton Building Society stepped in to rescue smaller rival Scarborough Building Society, which has seen its profits slide in dismal trading conditions.

Skipton will merge with Scarborough in a rescue package that will safeguard jobs, but the Scarborough name will disappear from the high street.

Skipton has promised there will be no compulsory redundancies among Scarborough's 396 employees, although two of the nine branches may close in York and Scarborough as Skipton already has a presence in both.

Lloyds announced yesterday that it will look to save over £1.5bn a year, a 50 per cent increase on its initial estimate.

Lloyds chief executive Eric Daniels said it was too early to say how many jobs would go.

"It is premature to talk about job cuts, we are only a few weeks into the transaction," he said. "There will be some overlap, but I am dismissing talk of 40,000 job cuts and every other figure – be it 40,000, 30,000, 20,000 or 10,000. We have not arrived at any figure."

One Lloyds insider dismissed reports that there could be 20,000 job losses as "bunkum".

But union leaders have called on Lloyds to come clean.

Unite joint general secretary Derek Simpson, said: "It is completely unacceptable for the banks to continue fuelling speculation while leaving their worried staff in the dark. It is now time to start thinking about the human consequences of this takeover."

Lloyds has admitted there will "inevitably be some rationalisation of the combined workforce".

Last night Kirklees Council's Leader, Conservative Coun Robert Light, accused Prime Minister Gordon Brown of selling out on Halifax and Yorkshire.

"There have been no guarantees about jobs in Yorkshire," he said. "Initially we speculated 15,000 jobs would go, but it is quite obvious that there will be more job losses. Speculation is that at least 20,000 jobs will go.

"The repercussions of this for Halifax, and the damage done to West Yorkshire and its reputation as a key financial base could be devastating."

Regional Minister Rosie Winterton and Yorkshire Forward chief executive Tom Riordan will meet Lloyds chairman Sir Victor Blank today to make their case for saving Yorkshire jobs.

"Maintaining the presence in Yorkshire makes good commercial sense," said Ms Winterton. "This will essentially be a commercial decision, but I believe we've made a strong case. Halifax is the definitive mortgage brand."

Halifax MP Linda Riordan said: "They've got to offer us something concrete now. There's a lot of maybes, we want concrete security of these jobs in Halifax. I've got to praise the dedication of HBOS staff. They've had nothing definite but they've kept their heads down and got on with the job. They would be mad not to keep these staff on."

Both banks insisted the tie-up remains on track, with speculation of rival bids dismissed as "wishful thinking".

As recession takes hold, analysts are predicting things will get worse for UK banks.

James Hamilton, at Numis, said: "Undoubtedly 2009 is going to be a complete horror story for all UK banks, with no exceptions."

There was more bad news from the European Commission which warned that the European economy will "grind to a standstill" next year.