INVESTORS are joining forces to sue Britain's biggest retail bank Lloyds and five former executives, alleging they were misled over an ill-fated deal in 2008 they say wiped £6 billion off the total value of shares.

Their claim names Lloyds' former chairman Victor Blank, former chief executive Eric Daniels, ex-finance boss Timothy Tookey, ex-retail banking head Helen Weir and former wholesale banking boss George Truett Tate. It is the second US-style class action alleging bank misdeeds during the credit crisis.

Thousands of investors are also suing Royal Bank of Scotland, claiming damages of around £4 billion and alleging they were misled about the financial position of the former banking heavyweight during an emergency cash call at the height of the 2008 credit crisis.

London's High Court yesterday made a Group Litigation Order - designed to manage a large group of claimants - and lawyers representing the Lloyds shareholders past and present urged others to register claims by November 10 to avoid losing their right to compensation.

Under English law, such claims have to be launched six years from the date at which the alleged wrongdoing took place or was spotted. A campaign to draw attention to the cause, which will include newspaper advertisements, is due to begin today.

The Lloyds Shareholder Action Group, led by law firm Harcus Sinclair's litigation head Damon Parker, alleges Lloyds' former bosses breached fiduciary and other duties to win the backing of investors for a government-arranged purchase of HBOS and misled shareholders about its true financial position.

Lloyds, which subsequently had to be bailed out with £20.5 billion of taxpayer money and remains 25 per cent state owned, dismissed the allegations and vowed to defend itself.

"The group's position remains that we do not consider there to be any legal basis to these claims and we will robustly contest this legal action," it said in a statement.

When recommending the HBOS purchase to shareholders, Lloyds bosses valued Britain's biggest mortgage lender at around £5.9 billion. However, the business was "effectively worthless", the Lloyds Shareholder Action Group alleges.

"Many Lloyds TSB shareholders understandably feel they were made to pay to save HBOS for the good of the country as a whole. To them, HBOS was an impulse buy on the part of Lloyds' directors that wiped out the benefit of years of prudent management," Mr Parker said.

Investors allege they were not told HBOS was receiving emergency support from the Bank of England and US Federal Reserve, peaking at around £25.4 billion and $18 billion respectively.