The papers have reported with a pretty straight bat that the government has created an arms-length company to manage its bank shareholdings, mainly due to yesterday's heated Treasury Select committee meeting with the chancellor, head of the Bank of England and FSA boss all getting a rough ride..

Chaired by über-executive Sir Philip Hampton and Treasury official John Kingman as chief executive, the body will look to safeguard taxpayers' interest in the banks, and that value is created.

The Guardian reports the Lib-Dems as concerned that the other private sector board members to be recruited could have little experience of recession. Lib Dem Treasury spokesman Lord Oakeshott wanted them to have 'been around the block a few times'.

He added that UKFI would have its work cut out implementing more realistic banking bonus structures and lending policies.

Initially the company would manage its investments in RBS, HBoS and LloydsTSB, chancellor Alistair Darling also revealed that Northern Rock and Bradford & Bingley, both nationalised, would go into the new company's hands, reports the FT.

John Kingman is described as 'affable and highly intelligent', reports the Independent. He has served in a number of important roles at the Treasury, and is a former press officer to Gordon Brown during his time as chancellor.

But the paper warns that Kingman has never been involved in banking or fund management.

'Able as he is, though, the obvious query is how a figure who has enjoyed such closeness to ministers can fulfil the requirement that the government's relationship with UKFI be truly "arm's length",' the paper says.

Further reading:

Government creates company to manage banks' shareholdings