With a seasonal slump in lending during the last quarter of the 2012, the government has come under pressure to alter the scheme to increase lending to businesses.

This could see funds currently being used in the mortgage arena being diverted to other types of lending.

A senior Liberal Democrat told the Financial Times that both parties in government were looking to extend the scheme but that more needed to be done to help small and medium sized enterprises (SMEs).

“We are pushing for FLS to be extended and there is general agreement between both sides of the coalition,” the source said.

“Can we extend it, can we increase it, can we direct it to SMEs? These are the things on the table.”

The report suggests that no changes will be announced in George Osborne’s Budget next week but that the Chancellor will speak of the importance of lending to small and medium sized businesses.