The plan to merge three government-owned banks into a single national investment bank has been scrapped under pressure from the banks themselves, the Financieele Dagblad reported on Wednesday.

The creation of a single bank by merging public authority bank BNG, public sector bank NWB and Dutch bank for developing countries FMO was announced enthusiastically last summer. The single bank would have had a balance sheet total of more than €250bn.

Instead, the cabinet is now backing the creation of a much smaller fund to help finance economic development projects within the Netherlands. BNG and NWB said the financial advantages of last summer’s proposal were too optimstic.