Britain requires a new economic framework that is less reliant on the financial services industry and under which the City’s influence would be diminished, according to a confidential briefing given by the Business Secretary, Peter Mandelson.

At a meeting in Westminster on Friday, Lord Mandelson is understood to have told senior officials from the Department for Business, Enterprise and Regulatory Reform and Shriti Vadera, the business minister, that they must go on to a 'war footing' as they prepare to deal with the economic fallout from the banking crisis, which has seen tens of billions of pounds of taxpayers’ money being used to recapitalise some of the country’s largest banks.

This weekend, the banks are negotiating with the Treasury over whether they will be allowed to make dividend payments while the Government holds preference shares.

Sunday Telegraph