Britain will get a stake of up to 77 percent in Lloyds Banking Group after agreeing a deal to cap the bank's losses at 260 billion pounds ($370 billion) of risky assets.

The deal will see the government's voting stake in Lloyds rise to 65 percent from 43 percent if shareholders do not take up an offer to buy 4 billion pounds of shares. The government's stake could rise to 77 percent if non-voting B shares are converted.

The deal will slash the risk on assets Lloyds holds and boost its core tier 1 ratio to 14.5 percent from 6.4 percent.

($1=0.7030 Pound)

(Reporting by Steve Slater; Editing by Clarence Fernandez)