Up to £4bn worth of Lloyds Bank shares will be offered to small investors at below-market prices if the Conservatives win the election, David Cameron has confirmed to the BBC.

The offer would be part of the £9bn sale of shares in the bailed-out bank announced in the Budget in March.

Mr Cameron said it would "help us recover billions more to pay down the national debt".

Labour said the Tories had announced the plans at least seven times before.

Shadow Chancellor Ed Balls said he would be "happy to have a look at" the plan as long as it was not which would lead to big institutional investors "making a killing".

The Liberal Democrats said the idea had been looked at by the coalition government but decided against because it was not clear the money could be recouped for the taxpayer.

Under Mr Cameron's plans, buyers who keep their Lloyds shares for a year will be rewarded with a loyalty bonus.

It will include one additional free share for every 10 shares that they still hold.

With Lloyds shares closing at 78.75p on Friday, those offered to individual investors will be sold for more than the 73.6p a share paid by the previous Labour government when it bailed out the bank following the financial crash of 2008.

The prime minister said: "We haven't announced it before. We've said we want to see Lloyds back in the private sector but we haven't said there'll be a retail offer so they can own shares in healthy, successful British banks.

"The crucial point is it's more of clearing up the mess that Labour left us. The taxpayer put £20bn into these banks and I want to get the money back.

"We've already recovered billions and this will help us to recover billions more to pay down the national debt.

"But I think that at the same time that having people in our country being able to own shares in healthy, successful British banks is the sort of country we should be building."

For Labour, Chris Leslie, shadow Chief Secretary to the Treasury, said: "The Tories have now announced this seven times. They promised it before the last election and they're turning to it again just weeks before this election."

Mr Balls told Sky News said: "If the best way to make sure that small savers get a fair deal is to have a discount, that's something I'm really happy to have a look at."

But he said the government had got it wrong with the Royal Mail sale and said he would not sell the shares at a discount if "the killing doesn't go to the taxpayer, the national debt - it goes to big institutional investors".

Lib Dem Chief Secretary to the Treasury Danny Alexander said it was a "highly irresponsible" proposal.

"This idea is one that we have looked at several times in government... and decided against, because it's not been clear that we'd be able, through this method, to get the money back for the taxpayer," he told BBC Radio 5 Live.

"The British people have put a lot of money and made a lot of sacrifices as a consequence of the financial crisis, and as we are able to return these banks to the private sector, people should be able to benefit."

UKIP's Nigel Farage said he welcomed plans to return Lloyds to private ownership with a big discount offering to members of the public "but the price must be right otherwise the taxpayer loses out".

Under the terms of the retail offer, buyers will receive a discount of at least 5% on the market price at the time of the sale, with priority being given to investors purchasing up to £1,000 worth of shares.

The minimum purchase will be £250 and there will be a maximum limit of £10,000.

The government has already raised £9bn from the sale of Lloyds shares, and the state's stake in the bank - which was 43% at the time of the bailout - is now down to 22%.

The proceeds from the latest offering will be used to pay down the national debt.
(BBC)