The honours forfeiture committee is expected to meet tomorrow to consider whether to strip Sir Fred Goodwin, the former head of Royal Bank of Scotland, of his knighthood.
David Cameron announced in the House of Commons that the committee would consider a report by the Financial Services Authority into the collapse of RBS as part of their deliberations. But the committee, chaired by Sir Robert Kerslake, the head of the Civil Service, is unlikely to take a final decision for several weeks.
Sources close to the committee said it is currently constrained by rules which only allow it to remove honours if the recipient has been jailed for a criminal offence or struck off by their relevant professional body for "actions or failures" directly relevant to the granting of the honour.
Neither of these would apply to Mr Goodwin – despite calls from across the political spectrum for him to be stripped of his knighthood.
It is understood that the committee is likely to go away and ask for more evidence before making a decision.
"This is going to happen but not imminently," said the source.
"It is not as straightforward as just making it happen – there are rules which have to be followed." It is possible that the committee may try and argue that the Financial Services Authority's report into the near-collapse of the Royal Bank of Scotland amounted to censure of Sir Fred of the kind that could trigger the withdrawal of his knighthood.