Lloyds Banking is mulling a huge rights issue to avoid joining the UK government's asset protection scheme, reports Wednesday suggested.Sky News suggested the part-nationalised bank could raise as much as £25bn in new capital including disposals and asset sales. A rights issue would account for £15bn of that total, which would make it the largest rights issue ever seen in the UK. Assets to be sold under the plan would include Scottish insurer Scottish Widows.The government is said to be keen on the move with the bank set to present chancellor Alistair Darling with a detailed plan over the next few days. The government is also likely to back the cash call and take up its full entitlement, the reports this evening added.Objections to Lloyd's participation in the APS scheme have been growing, largely due to the near £15.7bn cost of it taking up the toxic asset insurance. Lloyds had planned to put £260bn of assets into the scheme, but with financial markets stabilising it has made clear in recent months that it was looking at alternatives to joining the scheme.A recent stress test undertaken by UK regulator the FSA suggested it needed to raise £24bn of new capital to avoid the need to join the APS.