The trustees of UK lender HBOS's final-salary pension scheme have backed down from threatened court action to delay the takeover of the bank by its larger rival Lloyds TSB. However, the potential £3bn to £5bn (€5.6bn) scheme deficit is still hovering over the deal, with an agreement between the parties remaining elusive.

The dispute between the trustees and Lloyds hinges on the level of support to be offered to the pension scheme if the government-brokered takeover goes ahead.