Depositors are to be guaranteed the first £50,000 of their savings if their bank fails, under a scheme to be announced by the Treasury today.

The figure is understood to be the “lead option” proposed in a consultation paper on new banking reforms and will replace the existing guarantee of £35,000. The figure would put Britain in line with the United States, which guarantees the first $100,000 of savers’ money in the event of a banking collapse.

The new proposals, the biggest shake up to banking regulation in the UK for decades, are designed to avert another Northern Rock-style banking fiasco. The £50,000 figure is less than the £100,000 that was first mooted in the immediate aftermath of the Rock crash. Under pressure from the banks, the Treasury has revised the number downwards.

A similar system is also used in the US, where there is a $50 billion compensation pot, built up over many years, although that would be only a drop in the ocean if a bank failed and depositors started to demand their money back. In the case of Northern Rock, savers had £25 billion of deposits in the bank when it collapsed and they formed the now famous queues around branches to withdraw their cash.

The Treasury is also expected today to give itself the power to force banks to prefund the compensation scheme, although Alistair Darling, the Chancellor, is expected to say that he will not yet set a date for the introduction of prefunding.

The banks have made clear that they would prefer to pay compensation as and when it is needed. They have also said that they want a “sensible” limit on the level of savings guaranteed by the scheme. The Treasury is expected to publish draft clauses from the reform Bill before the House of Commons rises this month, although the consultation will remain open until September.

Today’s document is also expected to give more details on how the Financial Services Authority and the Bank of England will share responsibility if a bank fails. It will outline the remit of the Bank of England’s new financial stability committee, which Mr Darling has made legally responsible for overseeing the stability of financial markets and the City in the same way that the Monetary Policy Committee is responsible for setting interest rates.