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The man who would be Chancellor of the Exchequer wants to break up those banks largely owned by the UK Government.

That's a much clearer position than we've heard from George Osborne before, and has been sparked by the trenchant views of Mervyn King, governor of the Bank of England, during a speech in Edinburgh this week.

Mr King said there hasn't been enough structural reform of banks, or talk of it, and that it is "a delusion" to think that reform of regulation will be sufficient response to the problems banks created over the past two years.

Gordon Brown made it clear at Prime Minister's Questions that he disagrees. His argument was that it is not clear splitting banks between utility and risky investment elements will have the desired effect:

Northern Rock was a small retail bank without investment risks, while Lehman Brothers was large and an investment bank without much retail, yet both became insolvent.

Mr Osborne's made his views clearer in Glasgow today, (Thursday), where he was taking questions from members of the city's Chamber of Commerce.

For the record, this is what he told me afterwards: "I thought Mervyn King did make a persuasive case in Edinburgh. I thought it was extraordinary that Gordon Brown and Alistair Darling dismissed it out of hand.

"And it's a concern that you've got this dispute at the heart of economic policy making in the UK. We've got to fix the regulatory system, and that means putting the Bank of England in charge.

"You also need to look at the scale of these banks, and as we come to sell the big government stakes, we need smaller banks, we need a more competitive banking sector, and we need to protect the taxpayer from really risky investment banking activities which sit uneasily with taking deposits on the high street. Mervyn King has a lot of sensible points."

Mr Osborne went on: "We've seen what's happening to the Scottish banking sector over the past two years. It's probably suffered more than any other banking sector in the world, and I want to see if there's a Conservative government that these mistakes are not repeated".

So is he in favour of bringing in more competitors, or in breaking up the banks we've got?

"You need to do both. You need to allow more people to come into the market.

"You need more competition in the sector. We've lost a lot of players. HBOS and Northern Rock have gone.

"We need to create more competition by allowing new people to come in, offering services to Scottish business. They're currently struggling to get that, because the credit crunch is still happening, and that's costing jobs.

"We also, when we come to sell the big stakes the Government owns in Lloyds, HBOS, RBS and the like, that we look to have a more competitive banking sector, that there are smaller banks. That's good for the UK, for the UK financial services sector, good for the customer".

One suggestion is that a Tory government could sell off its stakes in the banks with a share offering aimed at small investors taking small stakes, as the Conservatives did in the 1980s privatisations.

Says Osborne: "We haven't reached that point yet. The first thing is to get the banks nursed back to health. We've got to have a strategic plan. You can't just sell when it looks like a good price. You've got to have a plan for the banking sector".

Taking questions from Glasgow business folks, Mr Osborne also stressed his commitment to high-speed rail connection.

It won't be in the early stages of his intended crackdown on public spending, but he made the point that spending squeezes should not fall only on capital projects. Even if "full guns" are applied, he said it won't be 2015 until the first tracks get laid.