WASHINGTON (Reuters) - The U.S. government will allow banks to be first to announce Treasury Department capital infusions, backtracking from a plan to announce a list of some 20 banks as early as Friday, according to a source familiar with the U.S. Treasury Department’s plans.

The source said the Treasury changed its thinking on announcing the list of around 20 to 22 banks receiving capital injections because it would label winners and losers in the market.

“They want to draw it out over time to lessen the contagion,” the source said.

PNC Financial Services Group Inc earlier on Friday said it was selling $7.7 billion of preferred shares and warrants to the Treasury, aiding its $5.6 billion deal to buy ailing National City Corp.

First Horizon National Corp said late on Friday it will receive about $866 million in capital from the Treasury Department.

The Wall Street Journal reported on Friday that Capital One Financial Corp and SunTrust Banks Inc were also expected to receive government funds.

The Treasury had been set to announce the list of banks at 11 a.m. (1500 GMT) on Friday, the source said.

The Treasury Department has said it intends to release news of government investments in a consistent and orderly way.

“As previously stated, the Treasury will make public any agreement 48-hours after that agreement has been reached,” Treasury spokeswoman Jennifer Zuccarelli said on Friday.

However, there is still confusion in the industry as to exactly when that 48-hour clock starts ticking, if it is triggered by Treasury accepting a bank’s application or when the funds are received.

The Treasury has detailed a plan to directly inject $250 billion of capital into U.S. banks in exchange for preferred shares as part of the $700 billion Troubled Asset Relief Program aimed a calming financial markets.

Nine of the largest U.S. banks were essentially arm-twisted last week into signing on for the first $125 billion in capital infusions.

When the Treasury provided more details on Monday about the capital program, it said it would not announce any applications that are withdrawn or denied.

Secretary of Treasury Henry Paulson leaves the New York Stock Exchange, October 21, 2008. REUTERS/Shannon Stapleton

Neel Kashkari, the Treasury’s interim manager for the rescue program, told lawmakers on Thursday that more banks are expected to receive capital infusions within a few weeks.

Banks are starting to announce they are weighing applying for government capital.

Synovus Financial Corp said on Friday it may be eligible to receive about $300 million to $900 million under the Treasury’s program, according to a regulatory filing.

Oriental Financial Group Inc said it was considering applying to the Treasury for capital.

First Financial Holdings Inc said it was “considering the possibility” of participating in the Treasury’s program.