MR Jean Peyrelevade, chairman of Credit Lyonnais, yesterday increased his estimate of the state cash injection needed for his troubled French bank. He said privatisation would not occur until mid 1998 at the earliest.

Mr Peyrelevade said, in an interview, his company would need a cash injection of 12 billion French francs (£1.4 billion) to strengthen the balance sheet. That is an increase on the Ffr8 billion to Ffr9 billion he said was needed last week.

The injection would help prepare the bank for privatisation or trade sale to international investors, said Mr Peyrelevade.

Mr Peyrelevade's comment came as Mr Jean Arthuis, the French finance and economic minister, told the National Assembly his priority was to privatise Credit Lyonnais, which owns a 53 per cent stake in Woodchester Bank, as soon as possible.

The cash injection should raise the group's tier one capital ratio from 4.5 per cent to 6 per cent, making it more attractive to investors, said Mr Peyrelevade.