The UK government’s £37 billion stake in the UK’s part-nationalised banks will be held at arms-length with no direct boardroom representation, according to the two men charged with managing the investments, the Financial Times reported.

In an article in today’s FT, Sir Philip Hampton and John Kingman stress giving the banks commercial freedom to “protect and create value for the taxpayer”. They write: “We must operate on a commercial basis at arm’s length ... our job [is] to manage the taxpayer’s investments, not to manage the banks.”

Their approach, spelled out for the first time, contradicts earlier statements by Alistair Darling, the UK's chancellor, who last month said the taxpayer would have “appropriate representation” on the boards of Royal Bank of Scotland and a merged Lloyds TSB/HBOS, and the government would make the appointments. Neither now appears to be the case.

There have been fears in the wealth management industry that state control of a bank such as RBS, which owns the private bank Coutts, will raise question marks about client confidentiality, particularly at a time when the UK government has been seeking to crack down on individuals putting money into offshore financial centres.

Sir Philip, chairman of J Sainsbury, and Mr Kingman, a senior Treasury official, insist that the government will “engage robustly” with the banks’ boards, warning it wants them to pay executives “fairly but not beyond fairly”.

But they stress: “We have not been asked to act as some sort of general regulator of the recapitalised banks in difficult times.”

The new non-executive directors that the government insisted were a condition of the partial nationalisation “will not ... be our representatives and will not report directly to us,” they state.