Bank bail-out 'could send national debt soaring by £1.5 trillion'

Alongside a grim assessment of the state of the public finances – which suggests Alistair Darling's borrowing forecasts are much too optimistic – the ONS said that Lloyds Banking Group and Royal Bank of Scotland should be treated as public companies, as they were now partly under the control of the state.

The ONS said it would take time to assess exactly how much damage its decision would do to public sector net debt, but estimated that it would push it up by £1tn-£1.5tn. The upper estimate is twice the current national debt, and equivalent to about 100% of GDP.