“The Chancellor must resist buckling under this pressure. Plans to ring-fence risky investment banking from essential consumer retail banking must not be derailed by vested interest and must stick to the proposed timetable so that consumers never again have to foot the bill for a banking bailout that even the banks admit will not be repaid in our lifetime."
He added that 71pc of respondents to a Which? survey had said they were not confident that the Government will act in the consumer's best interests when implementing banking reform.
Which? is also calling on the Government to "fully enact" the competition recommendations made in Sr John Vickers' report on the banking sector to increase choice on the high street.
The Independent Commission on Banking, chaired by Sir John, published a report last September which looked into ways of avoiding major bailouts in future.
It made a series of recommendations including forcing banks to ring-fence their retail arms from investment banking divisions and other proposals included making it easier for customers to switch their bank accounts.
Under the Financial Services Bill, the FSA will make way for the Prudential Regulation Authority, which will focus on maintaining financial stability. The Financial Conduct Authority will be introduced and have responsibility for protecting consumers.
Which? said it welcomed the FCA's new powers, including the ability to ban misleading financial adverts, but that it must be a strong watchdog that stands up to the banks.
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