It is the UK’s biggest financial shake-up for years.

Britain plans to reform its banks, forcing them to set up barriers between their retail operations and riskier investment arms.

The aim of better protecting ordinary customers in any future crisis was outlined in parliament by the Chancellor of the Exchequer, George Osborne.

“It is important to know that this ring fence will not prevent banks from failing but it does mean that if banks get into trouble those elements of the banking system that are vital for families, businesses and for the whole economy can continue without resorting to taxpayers,” he said.

A government-appointed independent commission made the recommendations. Leading banks have lobbied against them, citing additional costs and red tape. London’s Mayor Boris Johnson also has concerns.

“By all means rebalance the British economy, but don’t kill the financial goose that lays the golden egg for loads of people who are on very modest incomes but who depend on financial services,” he said.

The government says taxpayers should not have to bail out banks in the future. But it also wants to ensure regulations do not harm London’s standing as a leading financial centre. Prime Minister David Cameron vetoed EU treaty changes this month to protect the City.