Takeover proves costly for UK govt

The cash injection into Britain's banks by the UK government this week is the biggest stake it has taken in the private sector since the nationalization wave by a Labour government after World War II.

The Oct 12 decision to purchase stakes in Royal Bank of Scotland Group Plc, HBOS Plc and Lloyds TSB Group Plc could cost as much as 37 billion pounds, the Labour government said. That compares with 80 billion pounds in today's money spent on nationalizing industries including transportation, coal, gas and electricity between 1945 and 1951.

The government has set aside as much as 50 billion pounds for equity stakes in the banks, and has also provided 250 billion in inter-bank loan guarantees and 200 billion in a special liquidity program.