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Alistair Darling has stated the deal for Lloyds TSB to save HBOS was absolutely necessary.

To facilitate the deal, the government has decided to clear competition rules, with the chancellor of the exchequer stating "financial stability must trump competition".

"We are going through truly exceptional times," Mr Darling told BBC Radio 4's Today programme.

"At the beginning of the week it was become clear HBOS was getting into difficulty. There wasn't much choice. This was the right thing to do."

Mr Darling said the government had helped and been in contact with both Lloyds TSB and HBOS, but the deal was led by Lloyds TSB and its commercial demands.

He told the BBC: "The decision was absolutely right and necessary

"If we had not done it, the consequences would have been very bleak."

The chancellor added it was "very sad for employees of HBOS and I am extremely concerned about jobs".

"Things will arise, but the key thing is that government, central banks, and regulators act decisively and quickly - the key thing is to maintain stability."