The government's National Investment Corporation (NIC) - a fund to help small businesses - may need an injection of taxpayers' cash to make up its £1 billion finance target. According to reports, officials will nonetheless try to reach an agreement with retail and investment banks on the fund by the end of the month.
Suggestions that the scheme had encountered problems first emerged after eight investment banks - previously asked to contribute £25 million each - refused to co-operate when they learnt about the bonuses tax in the chancellor's pre-Budget report.
Investment banks are also said to want the NIC funds to be put into their own pots which invest in the UK economy, while retail banks want funds to go towards directly extending loans to small firms.
The Times compares the aim behind the NIC to that of the Industrial and Commercial Finance Corporation, a body set up in the wake of the second world war to help smaller companies.
A £100 million contribution has already been promised by Royal Bank of Scotland, as it has by Lloyds - another institution now part-owned by the taxpayer. Barclays and HSBC are expected to contribute around £25 million each to the NIC. 
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