Lloyds Banking Group was tonight thrashing out the terms of its state bail-out ahead of reporting dismal results tomorrow including almost £11 billion of losses at HBOS.

The bank, created by the rescue of HBOS by Lloyds TSB, is set to put some £300 billion of toxic assets into the Government insurance programme.

Talks between Lloyds and the Treasury over the terms of the package could last into the early hours. The RBS deal was signed off just 20 minutes before it was announced at 7am today.

Lloyds shares rose by 14.1p to 71p on signs it will enjoy the same 2% fee charged to RBS to join the Asset Protection Scheme, much less than the 3% to 4% expected in the City.

However, the bank warned hopeful investors an agreement was yet to be reached. "There can be no certainty that Lloyds' participation would be on the same terms as those announced by RBS," it said. The fee could also tempt Barclays to take part in the insurance scheme.

The Government has already ploughed £17 billion of emergency funding into Lloyds in exchange for a 43% stake. Analysts warn this could increase tomorrow if the bank needs more cash to protect it from spiralling losses at HBOS.

Lloyds chairman Sir Victor Blank and chief executive Eric Daniels have faced a backlash since admitting this month losses for 2008 at HBOS will be much greater than anticipated.

The near-£11 billion loss, including £7 billion at the Bank of Scotland corporate banking division, will more than wipe out the £1.3 billion of profits at Lloyds TSB. The much-cherished Lloyds dividend has been scrapped and Daniels will be asked to explain why he pressed ahead with the ill-fated deal.