Controversial proposals to split the high street and investment arms of Britain's banks may not be implemented for at least three years and possibly until after the next election.
The reforms are due to be recommended by the Independent Commission on Banking (ICB) in its highly anticipated final report on Monday.Â
Chancellor George Osborne - who wields the power to act upon or ignore the ICB's recommendations - has approved the plan but reportedly will give the banks until 2015 to implement the proposals due to fears over the impact they could have on financial stability.
He will also snub demands from the Liberal Democrats to include the ICB's recommendations in the current Financial Services Bill, a move which will put him at odds with his coalition partners with Lib Dem Business Secretary Vince Cable also expected to demand that the reforms are introduced much sooner.
Reports suggest that while backing the proposals, which the ICB is expected to say will cost up to £10 billion, the Chancellor wants them brought in in a way that will not damage the banks' recovery prospects or the UK's appeal as a financial centre.
Mr Osborne, who received the report on Friday, said then it would be "foolish not to learn the lessons of what went wrong" but would not comment formally on the report's contents until after it was published.
The ICB is widely expected to recommend a ring-fence - or protective firewall - is set up to separate retail and investment divisions, in a bid to protect customers' deposits from future financial crises.
But economists and business leaders have warned the changes could impact on the UK's economic growth as the banks are likely to increase the cost of lending to offset implementing the reforms and some may consider leaving the UK.
Andrew Gray, UK banking leader at professional services firm PwC, called on the Government to determine a timetable for implementation as soon as possible, adding: "No one benefits from uncertainty and moving quickly will help mitigate impact on credit supply, recovery, UK competitiveness, bank staff morale and so on."
The banks have made clear their opposition to the ring-fencing proposals with the likes of Royal Bank of Scotland chief executive Stephen Hester and HSBC boss Stuart Gulliver expressing concern.