Osborne offers bankers a breathing space to lobby against proposals

George Osborne at the GQ awards earlier this week (PA)

Britain's largest banks are to be given a fresh opportunity to lobby for a delay of the reform proposals to be announced today by Sir John Vickers' Independent Banking Commission (ICB).

George Osborne will welcome the work by Sir John (inset) and his team – which is expected to recommend that banks "ring fence" their investment and retail functions – but the Chancellor will also pledge in a Commons statement to consult further with relevant "interested parties" before implementing the reforms.

i understands that banks – including Royal Bank of Scotland, Barclays, HSBC and Lloyds – will be among those who will be consulted by the Treasury. This opens the possibility that the banks – who argue that ring-fencing will jeopardise their ability to fund the recovery – will have another chance to persuade the Government to push back the timetable for the implementation of the reforms.

"It's time to move on from cosy consultations between the banks and the Treasury," said the Liberal Democrat peer, Lord Oakeshott. "The banks have already had every opportunity to make their case to both Vickers and the Treasury.

"Doing financial regulation without the banks would be like Hamlet without the prince."

Although Mr Osborne announced at his Mansion House speech in June that he was prepared to accept ring-fencing, there have been indications in recent weeks that David Cameron is sympathetic to the arguments of the banks that reform must be delayed so as not to jeopardise the recovery.

Ana Botin, the chief executive of Santander, was photographed leaving Downing Street last week with a confidential document that stated: "It will take a significant amount of time before any changes (from the ICB report) are legislated." The Vickers Commission was established to examine the case for structural reform of the banking sector after the formation of the Coalition in June 2010. The biggest champion of banking reform within government has been the Business Secretary, Vince Cable.

Mr Cable argued in a newspaper article yesterday that: "Banks must be under no illusions that reform is coming. The recession is not an excuse for postponing reform. Indeed our economic recovery depends on it." Tensions between the Liberal Democrats and the Conservatives over banking reform have emerged repeatedly.