Cash-strapped small businesses are being failed by the very banks that are being propped up by the taxpayers' billions, MPs have argued.

High loan charges and hefty arrangement fees face many local firms desperately in need of credit, while some are denied loans altogether.

"We deplore the behaviour of a number of those banks who have received so much public money and behaved in such an insensitive manner particularly to established customers," the Treasury Select Committee's latest report said.

It added there was an "unresolved inconsistency" between the assurances of bank bosses and complaints on the ground from struggling businesses over a lack of lending.