Alistair Darling is set for a tense clash with high street banks today as he insists that lenders do much more to end the credit drought, while banking chiefs demand yet more government aid.

The Chancellor told MPs that he and Lord Mandelson, the Business Secretary, will put pressure on the banks to improve drastically the availability and cost of loans.

Darling told the Commons Treasury Committee that banks needed to grasp that the quid pro quo for government aid to the banking system was that they should maintain more normal lending levels, and at competitive rates.

The Times