SHARES in Lloyds and Royal Bank of Scotland fell yesterday on fears that this week&rsquo;s break-up of Dutch bank ING by European regulators is an example of how UK banks that have accepted state aid will be treated.<br /><br />Meanwhile, chancellor Alistair Darling looks set to give Lloyds the go-ahead to market-test its plan for a massive &pound;25bn refinancing to see if there is investor appetite.<br /><br />He is likely to tell the bank within a week that it can formally appoint underwriters and test the market. <br /><br />Lloyds, in collaboration with underwriters lined up at UBS and Bank of America Merrill Lynch, has been working for weeks on the plan &ndash; which would combine a rights issue of &pound;11bn-&pound;15bn with the conversion of up to &pound;10bn of existing debt into equity.<br /><br />Lloyds, led by chief executive Eric Daniels, is desperate to avoid using the government&rsquo;s Asset Protection Scheme (APS) to insure risky assets, as this will raise the government&rsquo;s 43.5 per cent holding in the bailed out bank to around 60 per cent.<br /><br />Shares in Lloyds Banking Group fell five per cent to 80p yesterday, while RBS stock fell three per cent to 39.6p.