Lloyds TSB shareholders have backed its takeover of HBOS, accompanied by UK government recapitalisation plan, which should allow the deal to be completed in the middle of January 2009.

More than 96 per cent of shareholders voted for the takeover, the issue of new shares under the fundraising plans and six other resolutions, according to a statement.

"We believe this transaction provides certainty for the shareholders of HBOS and they, along with the Lloyds TSB shareholders, will have the opportunity to share in the benefits that come from the combination," Eric Daniels, Lloyds chief executive, said after the meeting in Glasgow.

Most of the resolutions only needed majority approval and approval of the deal had been widely predicted; the effect on Lloyds TSB’s private banking arm is as yet unclear.