The Government is to manage the taxpayers' multibillion-pound stake in some of the UK's biggest banks on an "arm's length" basis rather than through direct boardroom control.
Ministers had originally signalled that they were planning to appoint directors to the boards of the banks taking part in the £37 billion rescue package. The banks include Royal Bank of Scotland, Lloyds TSB and HBOS.
But the men heading the company being set up to oversee the historic scheme now say their job is to "manage the taxpayers' investments, not to manage the banks".
Respected City veteran Sir Philip Hampton and John Kingman, a senior Treasury official, will be chairman and chief executive respectively of UK Financial Investments (UKFI). The venture will be fully operational next month.
In an article published in the Financial Times that details UKFI's remit, the pair said their over-arching objective was to "protect and create value for the taxpayer" and that the company will operate on a "commercial basis at arm's length".
Sir Philip and Mr Kingman said UKFI was to employ a "small number of able people with high-grade financial skills".
The company will be involved in the appointment of directors at the banks, but the people concerned "will not be our representatives and will not report directly to us", they said.
Board members at the bailed-out banks can also expect to see their pay packets come under close scrutiny.
The article said: "Like any engaged investor, we will take a close interest in board remuneration structures.
"We want our investee companies to pay fairly, but not beyond fairly, for the world class talent they need."
