Lloyds, 43 per cent owned by the Government, is expected to sell a string of assets as part of efforts to reduce its reliance on state support.

The Halifax Estate Agencies division is now part of Lloyds following the bank's rescue of rival HBOS earlier this year. The business has a network of 218 offices across the UK, including 93 franchise operations.

LSL, whose estate agency brands include Your Move, Reeds Rains and Intercounty, said the talks "may or may not" lead to a deal.

LSL was formed after the management buy-out of Your Move, which has around 300 branches, from Norwich Union in July 2004.

Lloyds confirmed the negotiations and said it will provide an update "in due course".

n Finance giant Alliance & Leicester is to close a site and switch work elsewhere, with the loss of more than 200 jobs.

The firm, owned by Spanish company Santander, said its Heritage House site in Leicester will shut, with most of its 250-strong workforce moving to another office in Narborough, Leicestershire. Some work will be moved to Sheffield.