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Labour would block the sale of bailed-out bank RBS in a radical overhaul of the financial sector.

Easier access to capital for small firms and more money for public facilities and manufacturing are also part of Labour's plan being unveiled on Sunday.

Scandal-hit RBS is still 62 per cent public owned, having been saved by a £46billion from taxpayers in 2008.

But the Treasury plans to sell the entire public stake by 2024.

Shadow Chancellor John McDonnell said: “Finance is the central nervous system of the economy.

“It directs investment, deciding which businesses and projects get off the ground and which fail.

“For too long, this vital part of our economy has been solely in the hands of the big banks and the speculators.”

(Image: Wiktor Szymanowicz / Barcroft Images)

He said the financial crisis and lack of investment in small business, manufacturing and infrastructure showed the current economic model has failed.

He said: “When the financial crisis struck, the banks were bailed out but the rest of us were sold out. It’s time to secure the investment we all made and use it to benefit the many not the few.

“Labour will build a new, public banking ecosystem to promote vital national priorities and give our SMEs [small or medium-sized enterprise], start ups and co-ops the best chance of success.”

Labour also plans to start a £250billion National Investment Bank and regional development banks for firms, infrastructure and industries.

Mr McDonnell also pledged green industries in towns where traditional industries have disapperared.

RBS has already cost the public £3billion of the initial bail-out and Labour would change its management and focus on productive investments.

It would end the branch closure policy – just 54 are left in England and Wales.

Last year RBS posted its first annual bottom line profit in 10 years.

Selling the public stake is projected to lose about £28.5billion, due to the drop in the 502p per share price paid by the Treasury in 2008.