THE SeaDragon debacle just gets worse and worse. First, Lloyds TSB, the part-nationalised bank saved from disaster by our money, pulls the plug on a contract that would have created 1,000 jobs in the North-East.

Now it emerges that the same bank may have to loan the consortium behind the scheme a further £110m to have the project switched to Singapore.

Meanwhile Government officials wring their hands in anguish and bleat about how they are powerless to intervene.

We have one question: why?

Lloyds TSB is 43 per cent owned by the British taxpayer. That could soon rise to 65 per cent – and even as much as 77 per cent – because the Government has agreed to buy any shares not taken up in a recent £4bn issue.

Announcing this bailout last month, Chancellor Alistair Darling said: “Restoring our banks to full health and ensuring they are able to support creditworthy businesses is an essential part of any plan for recovery.”

But instead of supporting creditworthy businesses in Britain, the bank’s money is being used to support work in Singapore. How can that help our recovery Mr Darling?

As a major shareholder, the Government could demand answers. Instead it just hands out platitudes.

As far as the North-East is concerned, neither the UK Government nor Lloyds TSB have emerged from this with much credit.

Conversely, both Cleveland Bridge and McNulty Offshore have conducted themselves with professionalism throughout. We wish them well.