Alistair Darling will in the next few days set out a blueprint for financial regulation in Britain, which has at its heart a beefed-up tripartite system, rather than a wholesale transfer of powers to the Bank of England.

In what some will see as a snub for Mervyn King, the Bank of England governor, the chancellor’s blueprint will draw heavily on the recommendations of Lord Turner, chairman of the Financial Services Authority (FSA), which set out key roles for the FSA and Treasury, as well as the Bank.

Treasury officials stress that Darling is not complacent about the need to strengthen regulation and he does not see his proposed reforms as maintaining the status quo.

His blueprint, which will take the form of a green paper rather than firm proposals, will build on existing measures that require all institutions to have “orderly wind-down” procedures in place, to prevent one bank failure from damaging the entire system.

It will propose that banks hold more capital during good times, to provide a buffer when business turns down – so-called dynamic provisioning. It will also signal tougher new liquidity requirements.

The FSA and the Bank will have a role in “macro-prudential supervision”, ensuring that the actions of individual institutions do not threaten the system as a whole.

A significant part of the beefing-up of the tripartite system will involve more powers and resources for the FSA, widely seen to have fallen down on the job. It will monitor bank remuneration, as part of a new regime that will focus on business models and risks, and devote more time to complex institutions.

King will this week give evidence to the Treasury committee and will insist he was not attempting a power grab when he bemoaned his lack of regulatory sanctions during his Mansion House speech.

Officials say the governor was keen to ensure that any new arrangements for regulating the banks have adequate teeth.

He was criticised at the beginning of the financial crisis nearly two years ago for warning of the “moral hazard” involved if the private sector is allowed to make all the profits but the public sector ultimately carries the risk. He believes those concerns remain.

The Treasury, FSA and Bank appear to be in agreement that commercial banks with investment-banking arms should be required to hold more capital and liquidity than narrow, or “utility” banks.

The City, which is concerned about the threat of EU-wide financial regulation, is also worried about the direction the debate is taking.

John Varley, chief executive of Barclays, has hit back at criticisms of his business model by King and a string of politicians.

King used his speech to claim that it was “not sensible” for retail banks to benefit from an implicit government guarantee while also running high-risk investment banks.

The comments were interpreted by the City as a direct attack on Barclays, and were swiftly followed by calls from the Conservatives and the Liberal Democrats for the bank to be broken up, or for its investment-banking arm to be ring-fenced.

The calls have added to demands for a reinstatement of rules such as America’s Glass-Steagall Act, which stopped retail banks acting as investment banks. Bank officials denied this was King’s intention, but his comments, together with his warning that no bank should be too big to fail, provoked alarm.

“Commercial banks today are active in the traded loan market and in foreign exchange,” said Varley. “It’s very clear the customers of commercial banks today want and need them to undertake these activities.”