The Treasury supported the ill-fated merger between the Co-op Bank and the Britannia Building Society in 2009, the Co-op's former chairman claimed yesterday.
Paul Flowers also told the Treasury Select Committee that the Business Secretary, Vince Cable, and the former financial secretary to the Treasury, Mark Hoban, made "positive noises" regarding Project Verde, as the collapsed plan by the Co-op to buy 632 branches of Lloyds was known.
Mr Flowers said Mr Hoban was in regular contact with former Co-operative Group chairman Peter Marks over Verde, and claimed there "was a great deal of political goodwill to succeed" in the process. His testimony contradicted other former Co-operative executives', who have denied there was any political interference.
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