Ministers have abandoned plans to ditch copper coins and the £50 note, announcing on Saturday that both will be retained despite concerns over criminal use of large denomination notes.

A review begun in March at first envisaged scrapping 1p and 2p coins and the £50 note, but ministers have now backed away and will instead replace the current note with a new plastic version

The move followed an outcry over coppers, which the prime minister pledged to defend despite Bank of England research showing that there was no evidence eliminating small and expensive coins led on average to prices being rounded up.

It also represents a defeat for ministers and officials who had wanted to get rid of the £50 note to make it easier to tackle the hidden economy and the illegitimate use of cash.

The Treasury’s campaign to modernise cash was undone by Theresa May moving quickly to reject “trashing 1,000 years of history” following campaigns launched in the tabloid press and comments by the Treasury’s former top official saying “only banana republics don’t have a coin representing the lowest denomination of their currency”.

With 330m £50 notes in circulation and thought to be widely used for criminal activity, the Treasury was also keen to eliminate the note, following other countries which have also withdrawn their largest denomination notes. But it has decided against any controversial move.

Announcing a new plastic £50 note, to supplement the plastic £5 and £10, Junior Treasury minister, Robert Jenrick, said that people should have as much choice as possible with their cash.

“Our money needs to be secure and this new note will help prevent crime. This modern £50 note follows the popular new pound coin, which is the most secure of its kind in the world,” he said.

A plastic £20, featuring the artist JMW Turner, will be introduced in 2020.

The Bank of England said it had started the process of designing the new £50 note, but gave no indication when it would be introduced other than saying it would be after 2020.

It said that plastic notes were safer and stronger, which would make them more valuable to criminals. To address that problem, the central bank added that the new notes would be “harder to counterfeit and increase the quality of notes in circulation”.

The announcement at the weekend comes just over two weeks before the Budget and follows a government consultation on its cash issuance.

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