The former telecoms regulator, Don Cruickshank, who is heading the review, said their unhelpfulness meant his full report, due to be published by the end of the year, would now be delayed.

"The unco-operative behaviour and delaying tactics of some of the major banks mean I will not be able to give the issues the consideration they demand to this timescale," Mr Cruickshank said.

Don Cruickshank: Called on banks to fulfil thier promises

"The Chancellor (Gordon Brown) has agreed that the review may now have as long as it takes to get the information I need to fulfil the remit he set me."

He called on the banks to make his life easier: "Let's have the co-operation that you promised, let us have it soon and it is in all our interests to have the second part of the review finished."

Anna Bradley of the National Consumer Council said Mr Cruickshank's criticism would "ring true" for many customers.

"We have looked at various times at the banks, and consumers do find them unco-operative and sometimes insensitive at times when they really need extra understanding," she said.

Bank charges under scrutiny

The review has been examining how fairly customers are treated in terms of bank charges and the passing on of interest rate cuts.

It has also been looking at the relationship between banks and the small and medium-sized businesses to whom they lend.

The interim report focuses on how legislation can ensure banks are regulated while at the same time remaining competitive and able to offer good value products to customers.

Mr Cruickshank said successive governments and regulators had stifled competition with too much red tape, resulting in an "absolutely predictable" poor deal for consumers.

He added: "This competition versus regulation issue is not confined to financial services."

'Concentrate more on competition'

The interim review says the Financial Services Authority, the watchdog being created to oversee banks and other financial institutions, should make sure it concentrates on competition as well as regulation.

And it says that the financial services sector should not be excluded from competition law - the anti-monopoly watchdog, the Competition Commission, rather than government ministers, should take the final decision about any mergers and takeovers.

Gordon Brown welcomed the report's emphasis on strengthening competition in the financial sector and said he looked forward to the final review with interest.

Howard Davies, the chairman of the FSA, said: "The proposals in the interim report would give the FSA important new responsibilities in the area of competition - responsibilities which are currently held by the Office of Fair Trading.

"We will need carefully to consider the potential impact on our staffing and structure, as well as on the achievement of the other statutory objectives. And we will be interested to hear the views of the industry and consumers."

Big bank profits expected

The report comes just as the big banks are beginning their reporting season. The UK banking sector is expected to reveal total profits of about £8.5bn this year.

Shares have already been hit heavily in recent days because of fears that the government would force banks to compete much harder and cut profits. They slipped even more in the wake of Mr Cruickshank's comments.

There has been further pressure from the Treasury, which has announced a review of whether mortgage lending should be more tightly regulated under the new Financial Services Act.