The government's £10bn business lending guarantee scheme is weeks behind schedule and it is unclear when small and medium-sized businesses will be able to apply to receive finance from the scheme.

The £10bn scheme was at the heart of a range of measures introduced by business secretary Lord Mandelson in January designed to get financial institutions lending money again.

The lending guarantee scheme was supposed to become operational by March 1st to provide banks with extra capital to provide loans to small and medium-sized businesses.

Research by the Financial Times has revealed that a number of banks have submitted portfolios of corporate loans to be included in the scheme, but that the government has only just begun entering negations with them over the price that will be charged for the guarantees.

The scheme is also dependent on state aid clearance from the EU - and the government did not submit its application until last week.