The Treasury has decided the prospect of market volatility, along with the time it would take to implement a public share sale, would create “an unacceptable level of risk”, according to Sky News.

The broadcaster also pointed to the upcoming Scottish referendum, forthcoming Bank of England stress tests and the uncertainty over its planned resumption of paying dividends as other factors in the decision.

Lloyds is still 25% owned by the government following two separate share sales over the past year, the state having taken a 40% stake at the height of the financial crisis.

Lloyds shares are currently trading at 73.9p apiece, down 6.4% year-to-date.