COMPETITION watchdogs have set out a string of measures they think may be necessary to allow Lloyds TSB's takeover of Abbey National to go ahead.

The possible remedies emerged in a briefing issued by the Competition Commission to inform both banks of key concerns surrounding the merger.

It details 25 questions the commission wants considered within its inquiry and five measures should the deal be deemed against the public interest.

While one of those includes throwing out the merger, other remedies could involve the transfer of branches to other providers in areas where Lloyds and Abbey already have a strong presence.

The commission also said it may ask for the disposal of some of the pair's existing businesses, such as Cheltenham and Gloucester or Abbey's Internet current account operation cahoot. Abbey and Lloyds may also be required to provide undertakings relating to individual products offered by the enlarged group.

The commission is expected to publish its report on June 12, with the final decision on any merger to lie in the hands of Trade and Industry Secretary Stephen Byers.