It follows the earlier announcement from Royal Bank of Scotland in which the bank revealed plans to siphon off £325bn of bad assets into the scheme.
A statement from Lloyds Banking Group reads: “Lloyds Banking Group notes today’s announcement by RBS and confirms that it is in discussions with HM Treasury with regard to participating in the government Asset Protection Scheme.
“These discussions are ongoing and no terms have been agreed.
“There can be no certainty that Lloyds’ participation would be on the same terms as those announced by RBS.”
The group will report on its full-year results tomorrow.