Banking pledges to lend to small firms have been dismissed as unenforceable and half-hearted.

Roger House, chairman of the 6,700-member Federation of Small Businesses in Kent and Medway, welcomed the intention contained in so-called Project Merlin but said it would do little to change the attitude of many small businesses.

They had "lost faith" in banks and looked elsewhere for finance.

Mr House said the agreements "should not be allowed to let the government or the banks off the hook".

He added: "While we welcome the intention to lend more to small businesses, we still need to see a major restructure of the sector.

"Many small firms aren't going to the banks to access finance and credit and the main problem they face is the cost of credit.

"Many businesses have lost faith in the sector and are looking at other means of finance - and it is the smallest of firms that need finance most."

To achieve robust economic recovery, the smallest firms and start-ups needed access to finance, but the commitments "as with previous lending targets - are unenforceable."

Business consultant Jo Howard, from Tunbridge Wells, said there was also bafflement over the pledge on "new lending".

"It could well include renewal and rolling over of existing facilities," he said.

"It's important that this is clear as otherwise, it is a very half-hearted commitment."

Moreover, there was no consistent definition of small business.

Under Project Merlin - agreed with the Chancellor of the Exchequer George Osborne - the banks agreed to lend £190 billion, with £76bn earmarked for small firms.

Recent FSB survey figures show that around 84 per cent of small businesses are not approaching the bank for credit, either because they have already been refused or because the cost is too high.