Lloyds, which owns Bank of Scotland and Halifax, took another step towards being fully in private hands after a further sale of shares.

UK financial Investments, the Treasury-controlled manager of the taxpayers’ stake in the bailed-out banks, has reduced its holding to 2.95%.

Analysts believe the government is on course to get back the entire £20.3 billion pumped into the bank at the height of the financial crisis in 2009 when it almost collapsed following its acquisition of HBOS.

Chancellor at the time, Alistair Darling, led a rescue which saw the taxpayer take a 43.4% stake in the bank.

All proceeds from the share sales go towards reducing the national debt.

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