Funding for Lending loans more than triple to £5.8bn led by Lloyds and Nationwide

Net lending by banks participating in the Bank of England's flagship scheme Funding for Lending more than tripled to £5.8 billion in the third quarter, according to newly released figures.

The biggest net lenders in the three months to September were Lloyds Banking Group and Nationwide. Net lending fell at Barclays, Santander and scandal-hit the Co-operative Bank.

Overall, UK banks have benefited from £23.1 billion of cheap money under the scheme launched by the Bank of England in July 2012.

"An economic recovery has taken hold. These data show that a significant improvement in credit conditions, aided by the FLS, is now feeding through to lending," said Paul Fisher, executive director for markets at the Bank.

Funding for Lending allows banks and building societies to borrow funds cheaply in a bid to encourage lending aimed at businesses and individuals.

However, last week, the Bank announced that the scheme would no longer provide support for individual mortgage lending, focusing solely on small businesses, in a bid to dispel fears of a new housing bubble.