No one handed Sir Victor a bottle of Scotch and a loaded revolver, says one source familiar with UK Financial Investments (UKFI), the body which looks after the taxpayer’s 43 per cent stake in Lloyds. He wasn’t explicitly forced to quit.

But it’s nevertheless clear that the Lloyds chairman was told where the drinks tray could be found and was not discouraged from wandering off in the direction of the gun room. By letting him know he could not count automatically on its votes at the annual meeting next month, UKFI left Sir Victor in little doubt he had to do the decent thing.

Angry (and burnt) private shareholders have already been sending in votes against Sir Victor. A goodly proportion of institutional shareholders, which vote at the last moment, were thinking of doing the same.

UKFI has quickly picked up the City language of nods and winks whereby shareholders extract board concessions without having to utter anything so coarse as an explicit threat or ultimatum.

Sir Victor might feel a bit peeved. After all, it was Gordon Brown who encouraged him to push ahead with the ill-fated purchase of HBOS and waived the normal anti-monopoly rules. UKFI, though notionally run at arm’s length from the Treasury, still has to have all its main decisions approved by ministers.

To be punished by a government body for pressing ahead with a deal blessed and brokered by the Prime Minister might seem rough justice, if not a downright betrayal.

But Sir Victor, a dealmaker to his bootstraps, has to carry the can for skimping on the normal level of checking. If he had probed more deeply, he would have been alerted to the toxic assets on HBOS’s balance sheet and could either have walked away or extracted better terms.

His promise to go by June 2010 is a bit of face-saving. He will leave long before then. Lloyds cannot afford to be seen to be run by a lame-duck chairman and will be urgently seeking a successor.

The chairmanship is no easy job. Lloyds aims to find £1.5 billion of cost savings a year, an impossible task without shedding tens of thousands of employees — losses that will embarrass the Government.

The bank’s customers continue to default while taxpayers are already on the hook — through capital injections, loans and guarantees — for more than £300 billion.

The irony, however, is that even now the HBOS deal might just come good for Lloyds. With a dominant share of the personal banking market, Lloyds will enjoy unprecedented power.

But Sir Victor, who more than anyone was seduced by that glittering prospect, won’t be around to enjoy it.

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