Don Cruickshank, has accused the Government of backing away from implementing his recommendations after pressure from banks.
He had advocated the payment transmission systems operated by banks, which handle credit cards, cheque clearing and other transactions, be subject to a new regulator, Paycom.
Cruickshank says following pressure from banks, the government has “watered down” its promise to introduce primary legislation to introduce the regulator.
The Treasury denied it had watered down its commitment to the report. “The chancellor has made it quite clear that he will legislate to set up the regulator for money transfer systems,” said an official.