The Bank of England is considering a plastic fiver and a £50 with transparent slots to improve durability and protect against counterfeiting in the next generation of bank notes.
De La Rue, the British notemaker, bought the Bank's printing operations in 2003 and has a contract to produce the UK's notes until 2015. However, it is understood that the contract could allow new suppliers to produce some of these updated notes ahead of that date.
Bank officials are believed to be concerned that the £5 note, which as a low denomination changes hands quickly, is not tough enough. Sterling notes are currently made mainly from cotton, but Australia paved the way with a polymer currency that better withstands everyday use.
A source close to the Bank said: "This is at the evaluation stage. A decision won't be made for the next year or two and production a little while after that, but a plastic £5 note is a possibility even though it won't provide as much security as other options."
A polymer note is considered easier to replicate than those with clear, plastic windows within a traditional cotton fabric. The Bank is considering the latter option for its other notes, favouring a trial with the £50.
A far less used note, the £50 does not require the durability features of a fiver, but is more costly to the economy if counterfeited on a large scale. "The Bank is looking at ways of putting a see-through, transparent window on notes as a primary security feature," said the source.
An industry source added: "There are ongoing conversations about the future features of banknotes, particularly in order to combat counterfeiting, between the Bank and industry suppliers."
The European Central Bank is considering similar anti-counterfeiting measures for its second generation of banknotes. Banknote makers are producing prototypes, several of which are understood to include plastic windows.
These notes have been heavily delayed: the first series is already nine years old and was expected to be replaced this year. However, existing notes would have remained legal tender for at least a few years as it takes time to replace them.
There have been suggestions that the first note to start production will be the €5, commencing next year and appearing in 2013. The €10 would follow in 2014 and the €20 in 2015.