Accord said that it does not believe that the Edinburgh-based bank could have a secure and sustainable future as an independent bank.

The comments will be a blow to the hopes of banking "knights" Sir Peter Burt and Sir George Mathewson, who are campaigning to block the takeover.

Chancellor Alistair Darling also warned that there is "no automatic right of access" to the Government's recapitalisation scheme.

Shareholders at Lloyds were today set to vote on the controversial takeover at a meeting in Glasgow.

Ged Nichols, general secretary of Accord, said: "All the evidence suggests that, as things currently stand, the only way forward for HBOS is a takeover.

"Because of the bank's reliance on the wholesale market for funding and its exposure to the UK housing and commercial property sectors, we do not believe that HBOS could have a secure and sustainable future on its own."

He also said that an independent HBoS would have to accept more funds from Government, which would become a majority shareholder.

He said: "This would mean HBOS would be subject to European Union competition rules – like Northern Rock and Bradford & Bingley – which would reduce its ability to compete for new business."

In a statement to Parliament, Mr Darling said that Government funds would only be available to "credible" senior management teams. He said: "There is no automatic right of access to the recapitalisation scheme."

At a minimum, the Chancellor said the institution must have a plan to meet an appropriate level of capitalisation, have a sustainable business plan and a clear funding profile.

Sir Peter said that the comments had been "regrettable" and insisted that he had been making good progress on raising £500 million – the difference between the £11.5 billion made available to HBOS and the £12bn its board said it needs to keep it afloat independently.

"For those seeking to keep HBOS independent, (The Treasury) has raised every hurdle it could find to the highest possible level," said Sir Peter.

"Although ostensibly leaving the decision to shareholders, the barriers to any alternative proposal are now so great as to make any such proposal effectively improbable.

"It is particularly sad as we were making good progress and were on course to raise at least the difference between the £11.5bn and the £12bn needed to keep HBOS independent.

"Although we are still looking at other options, it appears likely that the takeover, with the consequent loss of jobs and the anti-competitive aspects noted by the Office of Fair Trading, will come to pass unnecessarily."

A spokesman for HBOS welcomed the "very clear statement" from the Chancellor.