Barclays was warned on Monday that its balance sheet would be subject to forensic Treasury examination if it decided to dump toxic assets on the taxpayer, amid signs that the bank could face a higher-than-expected bill for using the government’s asset insurance scheme.

Barclays executives are studying the terms of the Lloyds deal to insure £260bn of assets as they decide whether to formally apply to join the scheme before a March 31 deadline.