Lloyds denies spin-out claims

Darryl Eales, chief executive of Lloyds TSB Development Capital (LDC), was reported to have said that he expected to start raising money from third party investors by 2013 and that LDC could be independent in five years.

But a spokeswoman from Lloyds Banking Group said: "We have no intention to divest our interests in LDC".

LDC, which has an office in Leeds, has invested 230m in 11 deals this year, including 30m on a major stake in education and skills firm JHP, which operates 57 bases including Halifax, Hull, Leeds, Sheffield and York.

LDC has attracted political scrutiny because Lloyds is more than 40 per cent owned by the Government.