The Bank, however, risks running straight into another row, because the most practical alternative to animal fat, it says, is palm oil – and that is likely to spark protests from environmentalists unless it can be sustainably sourced.

Revelations last year that the new plastic £5 note contained animal-derived additives sparked anger and boycotts, and the Bank has now launched a consultation to gauge public opinion over what materials to use for the next £20 note and future reprints of the £5 and £10 notes.

It decided earlier this year not to withdraw plastic £5 banknotes from circulation and said it would push ahead with production of the new £10 polymer note featuring Jane Austen, which is to be issued in September.

But the Bank has postponed signing a contract for the production of the plastic £20 note, which is to be issued by 2020. It has been working with De La Rue and Innovia Security, the potential suppliers of the polymer material that would be used for future bank notes, to assess alternative options to animal-based products, such as palm or coconut oil. The Bank also commissioned a report on the environmental impact of a range of additives from a consultancy firm, Efeca.

The Guardian reports that On Thursday, Threadneedle Street revealed that De La Rue and Innovia had concluded that “the only practical alternative to animal-derived additives” were “additives derived from palm oil” and that that was “consistent with advice received from Efeca”.

It wants a decision on new £20 notes by the summer and has called for people to give their views by 12 May.

“The Bank will reflect upon the various religious, ethical and environmental considerations raised by the inclusion of animal-derived additives and palm oil as the alternative,” it said, adding that it was conscious of the potential environmental costs of using palm oil. According to Efeca, it is the fourth worst agricultural product in terms of impact on global deforestation, with 8% of that between 1990 and 2008 resulting from palm oil production.

In a report published on Thursday alongside its call for public views, the Bank said it had consulted WWF on using palm oil. It was told by the conservation charity that because the palm oil crop is the most efficient source of vegetable oils, “it could be the least environmentally damaging source when produced sustainably”.

“However, non-sustainable production of palm oil (and other vegetable-based oil crops) can lead to destruction of forests, with significant negative impacts on wildlife, as well as on the local indigenous human populations,” the Bank’s report added.

Time for weighing up the evidence and public views is tight, because the launch of a new note can take more than four years.

“Whether or not to use polymer substrate produced using animal-derived additives in the new £20 polymer note is therefore an urgent decision that must be taken in summer 2017 ahead of planned pre-production trials,” the Bank noted.

WWF said it was encouraged to see the “thorough and extensive” review in response to the animal fat issues, but it urged the Bank to proceed carefully if it moved to palm oil. “Palm oil has benefits as it produces more oil per land area than any other equivalent oil crop,” said Emma Keller, the agriculture commodities manager at WWF.

“Worldwide demand is expected to double again by 2050, but this expansion comes at the expense of human rights and tropical forest – which forms critical habitat for a large number of endangered wildlife [species] – unless it is sustainable. People don’t want the bank notes in their pocket to come with such a high environmental cost. The Bank must only source RSPO (Roundtable on Sustainable Palm Oil)-certified sustainable palm oil or none at all.”

There was also a tentative welcome for the Bank’s consultation from the Vegan Society, which campaigns for manufacturers to use plant-based products in place of animal-derived ingredients such as tallow, an animal byproduct of beef or mutton fat found in the £5 notes.

“While we welcome the replacement of tallow, we encourage the Bank of England to ensure that any oils used are sourced sustainably,” it said.

Doug Maw, who started the petition to remove animal products from bank notes, urged people to contribute to the Bank’s consultation and expressed concern about the possible use of palm oil.

“During my meeting with the chief cashier, I pointed out that, of the numerous plant-based alternatives available, palm oil or coconut oil from non-sustainable sources are also unacceptable for ethical reasons,” he said.

“Palm production has brought the orangutang to the brink of extinction and coconuts are often harvested in a very exploitative way. I want them to consider ethical issues in all decision-making processes to avoid this kind of thing recurring.”