The British Treasury has confirmed plans to insure more than £250bn of toxic assets held by the Lloyds Banking Group.
In return for the bail-out, the Government will increase its stake in the group from 43% to 65%.
Lloyds is also promising to lend an additional £28bn over the next two years as part of the deal.
The company was forced to ask for further support because of heavy losses run up by HBOS, which it took over last year to prevent its collapse.
The British Government has already reached a similar agreement with Royal Bank of Scotland in return for a shareholding of almost 70%.