Sunday newspaper round-up: Bank break-ups, Lloyds, Double-dip...

A break-up of Britain's banks came a step closer yesterday after the head of a government financial commission said he was likely to recommend splitting their operations.Sir John Vickers, chairman of the Independent Commission on Banking, said the financial crisis had exposed a "damagingly rickety structure" at the heart of the financial system. He said the cost of bank failures "should not be borne by the taxpayer providing a generous safety net". One option, Vickers said, was to ring-fence customers' savings and loans away from high-risk investment banking operations, the Sunday Times reports.The Treasury has slammed the brakes on the Project Merlin talks with the banking industry as arguments over lending levels derailed plans for an early announcement of a deal. With details of an agreement between the Government and the banks originally scheduled for unveiling as early as tomorrow, a series of fraught telephone calls on Saturday led to the delay. One source said that an agreement could now even be "weeks away", leaving major banks - including Royal Bank of Scotland and Lloyds Banking Group - the difficulty of beginning to set bonus pools without knowing the final details of the deal, the Telegraph reports.Antonio Horta-Osorio, the incoming chief executive of Lloyds Banking Group, has launched an informal strategic review, fuelling speculation that he plans to speed up asset sales and set aside billions more in provisions against bad loans. The Portuguese banker, who joined the board of Lloyds last week, has launched a series of "induction sessions" with the bank's top managers. He has already held more than 20 of the sessions, according to sources at the bank, and has a further 20 pencilled into his diary for the next two weeks, the Sunday Times reports.Lloyds Banking Group has begun a mass mailshot of 231,000 letters offering possible refunds to Halifax customers who may have been mis-sold payment protection insurance on their credit cards, under a costly and large-scale outreach programme codenamed Project Kestrel. Internal documents obtained by the Observer reveal that 8,300 letters went out last Monday. Almost a quarter of a million will be dispatched by mid-February, asking credit card customers to contact a special call centre operated by outsourcing firm Capita.Serco, the services company that runs swathes of Britain's schools, trains, prisons and armed forces, has made a $2bn bid for the US spy firm SRA International. A deal with SRA would catapult Serco to becoming the biggest foreign company providing services to the United States government, the Telegraph reports.Fears of a double-dip recession will return this week when official figures are expected to show the pace of recovery halved in the last months of 2010. Economists believe that GDP grew by only 0.3% between September and December last year, down from 0.7% and 1.1% in the previous quarters. While most experts think the economy will continue to grow steadily this year, such optimism is not shared by the general public. More than half of them think the economy will slide back into recession over the next 12 months, according to a YouGov poll for The Sunday Times.Tony Hayward is in talks to join the board of Glencore, the world's biggest commodities trader, in what would be an extraordinary comeback just months after he was forced to quit as BP chief executive. Hayward became known as "the most hated man in America" for his handling of the Gulf of Mexico oil spill, which killed 11 workers and plunged the FTSE 100 group into crisis. He stepped down in October. Ivan Glasenberg, chief executive of Glencore, is understood to have contacted him personally. The Glencore boss is recruiting heavy-hitters to the board ahead of a £30bn float this year, the Sunday Times reports.Britain's hi-tech manufacturers issued a warning to the coalition today that the country will lose its place in world rankings unless industry receives more help. The GE survey of 400 of the UK's hi-tech manufacturing companies reports that Britain could fall from sixth to eighth position in global rankings if it doesn't boost skills, get rid of red-tape and improve access to capital. The report says that half of the industrialists warn that Britain could be overtaken by China and India in a decade's time, the Sunday Independent reports.A Middle Eastern sovereign wealth fund has held secret talks about a £1.5bn takeover of Manchester United football club. The Glazer family, the current owners, held discussions last month with an investment group controlled by the Qatari royal family. The approach, believed to be from Qatar Holding, came just weeks after the Arab state won the right to stage the 2022 World Cup finals. However, it is understood the high-level discussions foundered because of the Americans' demands for a sky-high price, the Sunday Times reports.Nuclear operators will have to pay the first £1bn towards the cost of any accident in the UK - seven times more than the current cap on their liabilities - the government will propose tomorrow. Energy secretary Chris Huhne told the Observer that he wanted to introduce the new rule to ensure that there would be no public subsidy for nuclear power. Currently, any operator of a nuclear site only has to pay the first £140m towards clean-up costs, with the taxpayer contributing the rest, the Observer reports.John Lovering is set to quit as chairman of Mitchells & Butlers, the pub group behind the Harvester and Toby Carvery chains, after just a year in the job. The retail veteran has told the board he wants to stand down as soon as a successor has been found. His departure is expected to be announced at the company's annual meeting this week and a search for his replacement is under way. When Lovering quits, he is likely to be followed off the board by Mike Balfour, founder of the Fitness First gym chain and a close associate of the M&B chairman, the Sunday Times reports. The advertising watchdog is set to announce an investigation into the accuracy of internet service providers' claims about broadband speeds and unlimited usage. The terms of the inquiry are expected to be announced as early as this week. The Advertising Standards Authority is considering whether to open the investigation to the public or confine it to submissions from the industry, but a public investigation is expected. It will examine the difference between the speed broadband providers claim they supply and that experienced by customers, as well as claims made on fair usage. The inquiry is in reponse to concerns from media regulator Ofcom and the Government, the Mail on Sunday reports.