A vegetarian café has refused to accept the new £5 note amid an outcry that the currency contains animal fats.

Sharon Meijland, owner of the Rainbow Café in Cambridge, put up signs warning customers about the policy after it emerged the new notes released in September contain tallow – a form of beef or mutton fat.

She is one of a vast number of people to be outraged at the decision for tallow to be used as an ingredient and who have called on the Bank of England (BoE) to scrap the new currency.

"[Tallow's] an animal product isn't it? Our whole business is based around not having anything like that on the premises," Meijland told the BBC.

"Although the same person doesn't handle the money that handles the food, that's not really the point."

She said she was "mystified" by the meat content in the currency, and added: "This is so repulsive that we are actually going to have to say that we can't take the notes in our restaurant."

Since the posters went up on Wednesday (30 November) no customers have complained about the policy, she said.

A petition which calls on the BoE to remove the tallow from the bank notes has accumulated over 125,000 signatures in a matter of days.

The central bank has since issued a statement confirming it is in talks with supplier Innovia Security to find "potential solutions".

The BoE said: "We are aware of some people's concerns about traces of tallow in our new five pound note. We respect those concerns and are treating them with the utmost seriousness.

"This issue has only just come to light, and the bank did not know about it when the contract was signed. Information recently provided by our supplier, Innovia, and its supply chain shows that an extremely small amount of tallow is used in an early stage of the production process of polymer pellets, which are then used to create the base substrate for the five pound note.

"Innovia is now working intensively with its supply chain and will keep the bank informed on progress towards potential solutions."