Metro, Starling and ClearBank have already been awarded a combined £280m from the Banking Competition Remedies Board, set up to oversee a £750 million package of grants demanded under EU rules for the state-aided bail out of RBS during the 2008 financial crisis.

Nationwide has scooped the lion's share of £80 million in funds available from the Capability and Innovation Fund Pool B, which is designed to promote competition in the market for banking services to SMEs. Two other recipients include Investec Bank and The Co-operative Bank, who each took home £15 million.

The news is a blow to digital challenger Monzo, which may have to put the brakes on its own plans for business accounts after being overlooked for the prize by the BCRB.

Nationwide has set its sights on attracting an estimated 340,000 business banking customers in the next five years. The mutual says it currently receives 50,000-plus enquiries each year looking for help with business banking needs.

Nationwide has already announced a £15 million deal with 10x Future Technologies to build its digital proposition. The firm says it will also provide specialist training for 7000 branch-based staff, as well as recruit for 400 new job roles based throughout the UK.

Nationwide chief Joe Garner says: “As a building society, we are in a unique position as the only mutual with the scale, trust and track record to offer a compelling alternative to the banks. While the money is a massive boost for our plan, we also aim to match every pound of the £50 million award with our own funding over a five-year plan."