On the BBC's Money Programme, he said: 'If NewCo fails then Lloyd's will fail with it.' NewCo will assume the old liabilities from syndicates on insurance policies written before 1985.
He added that Lloyd's would not be able to stand by and see NewCo go under. 'Which regulator anywhere in the world would allow us to go on trading if we walked away from real debts to policyholders?'
However, some analysts believe that estimates of pounds 4bn of reserves at Lloyd's have been overstated by as much as pounds 1.5bn, and that the size of asbestos and pollution claims have been underestimated.
Mr Middleton dismissed both suggestions. 'We are confident we will find pounds 4bn of reserves.' With regard to claims, he said: 'We have been very successful in the courts.'