"Our current bid is non-binding and we would only proceed if we could reach an agreement that was in the interests of our members and other stakeholders," the company's banking division said in a statement.
Lloyds, which is 40 per cent owned by the British government after a state bailout in 2008, said last year it had started exclusive talks to sell the branches to the Co-op - a mutually-owned conglomerate whose businesses range from a retail supermarket division to financial services.
However, both companies admitted last week that the transaction was proving to be a complicated one, and Lloyds has always kept open a fall-back option of spinning off the assets and then listing them on the stock market.
New British banking venture NBNK, which lost out to Co-Op last year in the bid to become Lloyds' preferred partner in the branch deal, has also retained its interest in the assets, in case the Co-Op deal unravels.
Britain's Financial Services Authority (FSA) is expected to want reassurances that the Co-Op has strong enough capital, an experienced board and adequate systems and business plan before it gives a go-ahead for the deal.
In December, credit ratings agency Standard & Poor's also cut its outlook on Co-Op due to the risks associated with the Lloyds deal.
Other analysts have said Co-op may need to raise money through a debt issue to fund the acquisition, estimated to be worth some £1bn.