The UK Shareholders Association (UKSA) today said it was forming an action group to represent smaller investors in Lloyds Banking Group in the wake of its latest bail-out from British taxpayers.

Bosses of Lloyds Banking Group were facing calls to quit today as the stock market prepared to give its verdict on the latest multi-billion pound bailout by the British taxpayer.

A legal battle between Northern Rock shareholders and the UK Government came a step closer today after Treasury lawyers rejected investor pleas for “fair compensation”.

Shareholders of beleaguered Northern Rock were facing up to more heavy losses today after the company admitted rescue plans for the group were “materially below” the company’s current value.