In March the OFT published a review of the Payments Council, which was established in 2006 and charged with setting out the strategy for UK payment systems and resolving competition, efficiency and incentive issues.

The review noted key improvements the Council has overseen, including the implementation of the Faster Payments Service.

However, the watchdog chided the Council for being too slow in driving improved payments for customers, noting that the Faster Payments Service was operating at only 69% capacity across member banks.

Now, in a letter to the OFT, Payments Council chairman, Brian Pomeroy, says: "We were disappointed with some of OFT's comments about our role in the delivery of Faster Payments (FP), since we had believed from our regular contact with the OFT, over a period of two years since we started, that you supported our interpretation of the Payments Council's role in FP and the way in which we have played it."

Pomeroy insists the Council's constitution does not give it "firm levers" to control the way individual banks offer Faster Payments to their customers.

He expresses disappoint that not every founder member bank is offering the full service to customers yet but says the Council had considered the operation of a competitive market would drive roll out "without any prompting on our part".

However, in a bid to "respond positively to the OFT's concern", the Council says it is looking at how it can provide regular reports and information about the progress of new schemes and roll-out of services to customers by banks and building societies.

Pomeroy has also rebuffed OFT suggestions on the criteria for full membership - in particular relating to vendors - of the council.

"We suggest that the presence of vendors and those who essentially supply the payment industry rather than are part of it would created the potential for conflicts of interest between suppliers in discussions at the Board and would give their competitors the impression of an "inside track"; it would also expand the size of what is an already large body," says the letter.

The Council says it will look to "enhance interaction with vendors" and consider creating a new forum with an express mandate to generate and understand fresh ideas for payment innovation.

In addition, there will be regular two-year reviews using criteria set out in the OFT's report, which called for bi-annual self-assessment against its objectives, including consultation with stakeholders. The OFT also said an accountancy firm should be commissioned to report in two years on how well the Council has performed against its integrity objective.