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Lloyds Banking Group is set to come under fire at today’s annual meeting in Glasgow from investors angry at its decision to take over the troubled HBOS and to tap them for a further £4 billion to replace part of the Government's bailout package.

The bank, which is 43 per cent owned by the state, will tumble into the red this year after the acquisition of HBOS, which made losses of almost £11 billion last year after writing off bad loans.

The bank has about 2.8 million private investors who have seen the value of Lloyds shares lose more than three quarters of their value over the past 12 months.

UK Financial Investments (UKFI), manager of the Government’s stake, has said that it will back all of today’s resolutions.

However, a new investor group, called Lloyds Action Now, will be launched at the meeting to explore grounds for legal action by shareholders in the former Lloyds TSB against the directors of the two banks and their advisers.

The UK Shareholders' Association (UKSA), which represents the interests of small shareholders, is also sending a delegation to Lloyds' annual meeting and is likely to ask several questions from the floor of the conference hall.

Today’s resolutions include a proposal to re-elect Sir Victor Blank, the chairman, who said last month that he would step down before next year’s annual meeting after coming under mounting criticism for his role in the HBOS deal.

The number of votes he receives will be closely watched as a measure of protest against the takeover.

Roger Lawson, a director at UKSA, told The Times that he wanted Sir Victor to step down immediately rather than sometime next year as promised last month.

Mr Lawson said that the other Lloyds directors should also be held to account for voting in favour of the HBOS acquisition

"It's always a corporate decision by the board. All the directors supported the decision and they should be held accountable," he said.

UKSA is recommending that shareholders vote against the re-election of Sir Victor, and against any of the directors standing for re-election who backed the HBOS deal.

It is also urging shareholders to veto the Lloyds remuneration report because directors' remuneration retains a strong bonus element.

Shareholders have until midday to take part a share placing that will convert the preference shares owned by the Government into ordinary shares.

If other shareholders snub the issue, UKFI could end up owning 65 per cent.

The results of the vote are expected early next week.

However, the fundraising is expected to receive support because the shares are being offered at 38.43p, a steep discount to Thursday’s closing price of 67.1p.

Lloyds is putting £260 billion in toxic assets — mostly from HBOS — into a taxpayer-backed insurance scheme to shore up its finances.

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