TheNational Audit Office has contradicted claims by George Osborne that the UK Treasury made a profit by selling stake in Lloyds Banking Group.

The National Audit Office said on Wednesday that the taxpayers suffered a loss of £230m through the sale of a stake in Lloyds Banking Group. The claims are against remarks by Osborne in which he said that the Treasury made a profit of £60 million by selling the stake. George Osborne had written on the day of the stake sale in September that the government had sold 6 per cent of Lloyds shares at 75p earning a profit for the taxpayers.

"Taking account of the cost of borrowing the money to buy the shares, there was a shortfall for the taxpayer of at least £230m," the NAO said.

New audit contradicted the claims after examining the borrowing costs incurred by the government when it bailed out the banks in 2008. It said that it is not likely that the government earned [profits by selling state-owned stake in the bank.

UK Financial Investments (UKFI), the Treasury unit that manages the government stakes in Royal Bank of Scotland and Lloyds Banking Group, had sold 6 per cent of the issued share capital of the banking group in the market. Chancellor George Osborne had indicated that the government will soon start selling its holding in the Lloyds Banking Group.