LONDON: The British government is set to approve refinancing plans by part-nationalised bank Lloyds worth 25 billion pounds, the Financial Times said Thursday.

Chancellor Alistair Darling will tell the bank within days it can go ahead with the refinancing which includes a rights issue of up to 15 billion pounds (16.6 billion euros, 24 billion dollars), the newspaper said.

Lloyds Banking Group (LBG), which is 43-percent owned by the taxpayer after a huge bailout, had agreed in March to put 260 billion pounds of troubled loans into the government's insurance scheme for toxic assets.

But LBG last month said it was considering alternative options to the Government Asset Protection Scheme, and was reportedly considering raising fresh capital by issuing new shares to reduce its reliance on the scheme.

The finance minister will reserve the right to withdraw approval for LBG's plan if he concludes the move is too risky, according to the FT.

"Bringing the private sector in to share the risk ought to be a good thing in principle," a source was quoted saying.

"Alistair Darling wants to market-test this idea to make sure it can be done and that the terms are right."