Britain’s two part-nationalised banks account for as much as ￡20bn of a ￡25bn capital shortfall identified by the UK’s new financial stability regulator, people close to the process said.

The Financial Policy Committee announced on Wednesday that UK banks were overstating their capital by ￡52bn, after it scrutinised their balance sheets with tougher measures of risk and factoring in looming fines and expected losses. The estimate was reduced to ￡25bn, less than some investors had feared, after factoring in banks’ existing capital buffers. The gap, however, must be bridged by the end of 2013, faster than had been expected.

Most of the black hole is concentrated in Royal Bank of Scotland, which is 82 per cent owned by taxpayers, and Lloyds Banking Group, which is 39 per cent state-owned.