The UK government has shelved its plans of a major retails share offer of the 9% of Lloyds Bank it still owns.

Finance minister Philip Hammond insisted that market volatility meant it was not sensible to attempt to sell the multi-billion pound stake it still own to members of the public.

The shares will now be sold via a ‘trading plan’ on the stock market with small numbers of shares sold to institutional investors.

Hammond claimed that the private sale would ensure the taxpayer recovered the ‘full investment’ made in the bank. In addition, he said that £17bn of the £20bn invested by the government during the financial crisis had already been sold back to the market.

Hammond said: “We need to recover the taxpayers’ money. The proceeds of the Lloyds bank sale – the priority is to turn these asserts into cash and use those to reduce debt.”