Such is the recommendation of the parliamentary commission on banking standards. Initial discussions over the document were completed last week and the draft report contains a recommendation that the government-backed bank be divided to separate the toxic assets from the rest of the bank, the BBC reported.

Members of the commission, made up of MPs and Lords, will now review the draft report before the final document is published later this month.

Chancellor George Osborne is likely to discuss the potential break-up when he delivers a speech at the Mansion House on 19 June.