Shares in British banks were down on the FTSE 100 despite early gains following the establishment of a new government after five days of negotiations between the three main political parties.

Yesterday evening Gordon Brown stood down as Prime Minister and was quickly replaced by Conservative leader David Cameron. Mr Cameron is currently forming a government with the third placed Liberal Democrats, whose leader Nick Clegg will become Deputy Prime Minister.

In early trading banks Barclays, HSBC, Lloyds Banking Group and RBS were up 0.1 per cent to 2.8 per cent on the FTSE 100.

However by 12:05 shares in RBS were down 4.16 per cent to 47.92 pence per share, Lloyds Banking Group shares fell 1.09 per cent to 59.64 pence per share, Barclays shares declined 2.54 per cent to 317.00 per share and HSBC shares dropped 0.54 per cent to 658.00 pence per share.

Overall the FTSE 100 was down 0.02 per cent to 5,333.72.