Secretive hedge funds will eventually be subject to the same supervisory rules as banks, under a tightening of Britain’s system of regulation.

The changes, which will require banks and other lenders to build up their reserves in healthy economic times, could become the basis for international efforts to overhaul regulation at the G20 summit in London on April 2. The moves will be proposed on Wednesday in a report by Lord Turner of Ecchinswell, chairman of the Financial Services Authority, who will call for an overhaul of the tripartite links between the FSA, the Bank of England and the Treasury.

They follow repeated pledges from Gordon Brown for a crackdown on the “shadow banking system”.

Hedge funds are open usually to a limited range of highly wealthy investors and in many jurisdictions they escape the regulations that apply to banks. Their methods, such as short-selling, have become increasingly controversial during the credit crunch and hedge fund operators have been accused of aggravating turmoil.

The Prime Minister spoke yesterday of “massive changes” in the supervisory system. He said that financial institutions needed to be supervised according to what they did, not on what name they gave themselves — be it banks, hedge funds or investment funds.

G20 finance ministers, meeting in Sussex at the weekend, agreed that hedge funds and their managers should be registered and have to “disclose appropriate information to assess the risks they pose”.

The moves on regulation come as ministers attempt to paper over their entrenched divisions on how to fight the recession through fiscal stimulus. The G20 members pledged that they were “committed to deliver the scale of sustained effort necessary to restore growth” across the world.

Alistair Darling, the Chancellor, insisted that the diverse countries had set aside their differences.

“We’re prepared to take whatever action is necessary to ensure growth is restored and we’re committed to doing that for however long it takes,” he said. “I believe that this provides a very clear sense of direction.”

Mr Darling, who will deliver the Budget next month, was unwilling to promise any further tax and spending measures for the UK economy.

Despite the façade of unity, the G20 is split chiefly between the United States and Europe over the scale of tax cuts and extra government spending needed to jump-start growth.

President Obama went out of his way to dismiss talk of splits. Speaking after weekend talks with President Lula da Silva of Brazil, he said: “I don’t know where this notion has emerged that somehow there are sides developing with respect to the G20.

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