The management and effectiveness of the UK's finance watchdog, the Financial Services Authority (FSA), is to be investigated by the government's accounting arm, the National Audit Office (NAO).

The London Evening Standard newspaper reports that government ministers are reportedly concerned at the FSA’s track record in fighting financial crime, as well as the dent to its reputation the FSA has suffered in the wake of scandals such as Equitable Life and the split-cap investment trust affairs.

The BBC reports comments made by prime minister Tony Blair last year that the FSA was hugely inhibiting of efficient business. However the man commissioning the new review, economic secretary to the Treasury Ed Balls, says that the creation of the FSA had been as important a measure as giving the Bank of England independence to decide monetary policy.

Indeed, the government denies that the review of the FSA’s performance is down to opposition to its tactics from consumers and the industry, rather that a thorough review of its activities was always planned at the end of its first five years.