Robert Peston’s excellent blog on the BBC website has hinted that the UK treasury may be taking a look at a suggestion made by Sir Peter Burt, the veteran Scottish banker who was chief executive of Bank of Scotland in its glory days but recently failed in a campaign to keep HBOS out of the clutches of Lloyds TSB.

Burt is proposing a sale-and-leaseback of toxic assets. A sale-and-leaseback between the banks and the state has two big advantages: there’s no need to value the poisonous assets; and losses on those ‘stinky’ assets would be absorbed by the banks in manageable chunks over about 10 years.

Peston has been ahead of the game throughout the credit crisis and has the ear of several treasury mandarins.