The big-five high street banks have hit back after criticism from Mervyn King, the Governor of the Bank of England, that they are not doing enough to ensure there are sufficient £5 notes in circulation.

Yesterday in a speech to the annual Mansion House dinner in the City of London, Mr King said the public needed £5 notes even if their distribution “did not correspond to the private interests of commercial banks”. This was a thinly veiled reference to the fact that most cash machines only stock £10 and £20 notes.

But today HSBC, Lloyds TSB, Barclays, NatWest and Abbey were united in their response, saying they did not put £5 notes in their cash machines because the public doesn’t want them.

“So far in 2007 the average withdrawal at our cash machines has been £68,” Tim Pie, of HSBC, said. “If our customers wanted us to put £5 notes in our ATMs we would look to do this but the demand is just not there.” Barclays said that it offered £5 notes from cash machines inside branches and on university campuses but that there wasn’t the demand for this elsewhere. “We look to respond to our customers’ needs but the feedback we’ve had is that in most cases they don’t want or need £5 notes in machines,” a spokeswoman for Barclays, said. Lloyd TSB said only 100 of its 4,300 cashpoints still dispensed fivers.

Mr King's objection to the high street banks' conduct stems from the fact the Bank of England is sitting on a pile of fivers that it cannot get rid of while the condition of the £5 notes in circulation deteriates rapidly. The problem of Britain’s dog-eared fivers has grown steadily over the past decade with the average lifetime of each note twice the length of ten years ago.

While the total value of Bank of England notes in circulation has also doubled over the same ten years, to £40 billion, Mr King noted that none of this increase had been accounted for by fivers, with a steady £1 billion of them circulating and growing steadily more crumpled.

But the British Bankers Association (BBA) said it was "surprised to hear the Governor's comment. Angela Knight, the chief executive of the BBA, said: "At cashpoints, bank customers routinely withdraw £100 at a time. It stands to reason therefore that a cashpoint dispensing £5 notes will run out twice as quickly as one dispensing £10 notes. This would obviously cause supply problems particularly at weekends. It would also mean twice as many visits to cashpoints by secure couriers, creating an additional security risk.”

Yet consumer groups questioned the banks’ analysis, suggesting that there was no connection between the amount that customers withdraw at cash machines and their demand for £5 notes.

On industry insider said: “The simple fact is that the banks do not want the added expense of having to supply their machines more often even if it is what customers want.” Despite the criticism, none of the big-five high street banks have any plans to re-introduce or increase the number of machines that issue £5 notes.