In July, Britain's banks scrapped their plans to abolish cheques by 2018 after pressure from MPs, consumer groups and charities.

Soon after, the Treasury select committee published a report recommending a range of measures designed to strip the industry-dominated Council of much of its power.

The report recommended that the Treasury should use an upcoming Financial Services bill to bring the Council formally within the system of regulation.

In a speech on Thursday, financial secretary to the Treasury, Mark Hoban, said that not only is the government looking at the committee's recommendations but that is could go further.

"I can announce today that we will go beyond this to consult in the New Year on how the regulatory framework for payment systems can be enhanced," said Hobun.

The MP argued that "whilst we have a world class payments industry in many respects, I want it to be even more responsive, innovative and competitive. Today, this is more important than ever, given the pace of technological development."

The Payments Council has previously denied that more regulation is needed although it has indicated its willingness to accede to select committee's demands on customer communications and on independent directors.