In an interview with the Financial Times (FT), Eric Daniels claimed that the new authority was duty bound to honour the agreement set up by the previous Labour government.
According to reports, an independent banking commission could reverse the deal and request the group be broken up.
Mr Daniels told the FT: âOne of the things that characterises most modern governments is that when you make an agreement with the state, itâs an agreement with the state independent of which political party is in power.
âThere was a sentiment [then] that financial stability was more important and that the issue of competition took second place. As a result of that, the secretary of state signed off the deal. That is a matter of public record.â
The takeover of HBOS occurred in 2009 during the global financial crisis and left Lloyds reliant on government stimulus to stay afloat.
Lloydâs recently announced that Antonio Horta-Osorio, Santander UKâs CEO, will be taking over from Mr Daniels when he relinquishes the post in March next year.
By Jim Ottewill