Cameron proposes new Bank powers

The Tory proposals would also give the Bank a new role of monitoring both consumer and company debt.

They aim to prevent a repeat of the collapse of Northern Rock and stave off the threat to the Bradford & Bingley.

It comes on the eve of the Conservative Party conference in Birmingham where the plans will be unveiled by shadow chancellor George Osborne on Monday.

The government is already proposing similar moves to avert bank failures through Banking Reform Bill which comes before parliament next month.