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Is there any reason now for the to proceed?

Or is it overtaken by the by the chancellor?

Scottish First Minister Alex Salmond is proceeding, as he has done from the outset, on the basis that the Lloyds TSB offer is the deal on the table.

That is the understandable presumption underlying the meeting of the National Economic Forum in Edinburgh.

However, there is now an alternative scenario abroad in the body politic. Tavish Scott, the leader of the Scottish Liberal Democrats, has said explicitly that HBOS should remain an independent bank and that the merger should be called off.

Mr Scott says that "market and banking circumstances" have changed enormously since the deal was first advanced with the blessing of the prime minister and chancellor.

In particular, Mr Scott draws attention to the substantial change in share price since the offer was tabled.

He also notes that both banks, both Lloyds TSB and HBOS, are partcipants in the recapitalisation announced by the UK Government.

He suggests further that this mechanism - also applying to the Royal Bank of Scotland among others - should be the route to bring stability to the sector.

I understand Mr Scott issued his statement following consultation with Vince Cable, the party's Treasury spokesman at Westminster, who has followed the credit crunch crisis closely from the outset.

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