Europe accuses Britain of failing to regulate Lloyd's

The government's regulation of Lloyd's has been attacked by a European Parliament report.

The report has raised the possibility that the UK Government could now be sued by Lloyd's investors who lost money.

Among several allegations, the report says the Government failed to implement laws to ensure that Lloyds produced transparent accounts.

Conservative MEP and report author Roy Perry told BBC Radio that Lloyds accounts were not properly signed off by auditors for several years.

Lloyds made losses of up to £8bn between 1988 and 1992. During these five years the market was hit by several damaging insurance claims.

However the EU obliges governments to ensure that insurers have funds to cover their liabilities.

The EU report said the British government was slow to act upon the EU Directives.

Lloyds' Names have hinted they may also bring a lawsuit against the government.