British Gas's Tell Sid campaign was the right way to run a privatisation First and most obvious is the leap in both banks" share prices over the past 18 months. Lloyds's share price has risen 107pc over the past year, while RBS is up nearly 50pc for the same period. The more than doubling in Lloyds shares saw them last month close above the taxpayer's "break-even" price of 61.2p for the first time in nearly two years. Combined with this has been the looming five-year anniversary of the banks" bail-outs. In the case of RBS, £45.5bn was eventually pumped in, while Lloyds received some £20bn after its merger with HBOS. With the anniversary due in October, the pressure is growing for the Government to show that the process of getting the taxpayer's money out of the banks, and at a profit, is under way. Third, came the recent announcement by the Prudential Regulation Authority that neither Lloyds nor RBS will be required to sell any new shares to meet a capital shortfall. Finally, the forthcoming report by the cross-party Commission on Banking Standards, a body set up by the Chancellor in the wake of the Libor-rigging scandal, is expected to give the Treasury a September deadline to look at "more radical options" for RBS. Among these is thought to be a "helicopter" sale of the bank's shares to the public, raising the prospect of a "Tell Sid"-style privatisation. Inside RBS and Lloyds, preparations are already being made to ease the Government off the banks" shareholder registers. Sir Win Bischoff, chairman of Lloyds, has privately told colleagues he thinks a first sale of the state's holding could come by September. Hence the form of the first privatisation has become a matter of more than theoretical interest. If the decision were purely down to capital markets, an overnight institutional offering would be preferred. Under this scenario, UK Financial Investments, the manager of the state's holdings in Lloyds and RBS, would go out to a handful of investment banks after the end of a day's trading session and ask them to bid for the share sale. With the potential prize being a coveted mandate to orchestrate the British government's first sale of, most likely, Lloyds shares, competition would be fierce and the state could sell stock at a small discount to, or even above, its break-even price. This is by far the best way to do this. An accelerated sale minimises market risk, reduces the likelihood of any leaks and would be the best signal to the market about the seriousness of the Government's disposal strategy," says one senior official briefed on the sale process. As an added safeguard, the Government could ask the banks leading the deal to "hard underwrite" the sale price, meaning that they would guarantee the proceeds. Last year, at the Treasury Select Committee, Adam Young, an advisory banker at Rothschild, told MPs it would be "perfectly possible" to get investment banks to "effectively underwrite sales for fees that are very, very slim basis points [a basis point is one-hundreth of 1pc]." If the banks do not prove sufficiently biddable, the Government could try to get large asset management groups to underwrite a sale. There would be no need to tell Sid. And the long process of selling off the state's holdings will have started at last.