Finance minister George Osborne said last month that he was postponing a planned sale of Lloyds shares due to global financial market turmoil, disappointing thousands of small investors hoping to benefit from a discounted sell-off.

"If the share price looked a bit stronger, it is quite possible the chancellor might decide on a reasonably rapid sale," Macpherson told an annual parliamentary hearing.

"We are in the hands of the markets. The government has made clear it is committed to a retail sale, and I think if you are going ahead with a retail sale, you have to be particularly sensitive to what is going on in the markets," he added.

(Reporting by David Milliken; editing by William Schomberg)