When news of HBOS’s huge losses broke this month, the man who cost the bank £6.9 billion took refuge in a modest sandstone villa in Dumbarton, the industrial town where he grew up.

Peter Cummings, the bank’s former corporate lending chief, whose modest semi-detached home belies the £2.4 million he was paid last year, shut himself inside and pulled down the blinds as the press pack outside demanded answers.

Mr Cummings was not always so shy. He courted some of Britain’s most colourful businessmen, including the philanthropist and retail magnate Sir Tom Hunter, Sir Philip Green, the owner of Topshop, and the property entrepreneur, Robert Tchenguiz.

He did not always avoid the press either: as corporate Britain’s kingmaker, he was always available on his mobile phone to favoured journalists.

Mr Cummings was not answering his phone yesterday, perhaps because Lloyds Banking Group — formed from the HBOS merger with Lloyds TSB — was outlining just how bad the losses in his division really were.

The bank detailed how Mr Cummings’s bad bets on property alone cost HBOS £1.6 billion last year and it has had to write off a further £1.3 billion on joint ventures, many of which were sanctioned personally by him.

The banks have now taken the keys to Mr Cummings’s big joint ventures, including the retirement home builder McCarthy & Stone, which he bought with Sir Tom Hunter. Crest Nicholson, the housebuilder in which he invested, has suffered a similar fate.

The first thing Lloyds did when it took control at HBOS was to strip out the problem investments at the Scottish bank — many of which were signed off by Mr Cummings — and put them in a special division.

Eric Daniels, Lloyds’ chief executive, said yesterday that the bank, which will be making staff redundant in many other divisions, needed to hire so many managers for the troubled division that it would treble in size. He said that the problems in this part of the bank would get even worse.

Sir Victor Blank, chairman of Lloyds, put on a more optimistic front, insisting that “acquisitions should be judged over time, not a few weeks after the deal has been completed”.

Lloyds said it had not yet agreed a deal with the Government that would allow it put £250 billion of toxic debts such as those signed off by Mr Cummings into an insurance scheme. The Times has learnt that Lloyds is locked in a row with the Treasury over how much it should pay to join the scheme. The Treasury and Lloyds were in talks until the early hours of Thursday, but failed to reach agreement. It is understood that the Treasury is asking Lloyds, which is 43 per cent owned by the taxpayer, to pay more in fees than the bank is prepared to spend.

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