National Savings and Investments (NS&I) is facing a bill worth hundreds of millions of pounds over a missing savings scandal.
An update will be given by ministers later on Thursday following a report by the Daily Telegraph that the Treasury-backed bank was seeking taxpayer funds to help it compensate customers for alleged failures in the management of their cash.
The paper said it could amount to a £400m bailout.
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Sky News understands that the bank is being told to foot the bill, which is not expected to run to such a high amount but still run into hundreds of millions.
The bulk of the 37,000 claims facing NS&I come from bereaved families who say they have not received funds that were due to them after the deaths of loved ones. These claims are also said to date back many years.
The bank, which offers a range of savings and investments to more than 24 million customers, including over 22 million Premium Bonds holders, has apologised for customer service shortfalls, but is yet to comment on the size of its exposure to redress and compensation.
The government was yet to comment, although the pensions minister Torsten Bell is to address the issue in a statement to MPs later on Thursday.
NS&I is no stranger to negative publicity.
Back in February, it was accused by a committee of MPs of being "bullishly confident" over a £3bn digital transformation project despite a host of challenges and delays that were also said to have exposed the taxpayer to additional risk.
The Public Accounts Committee declared it was not confident the scheme, designed to modernise NS&I's operations and measurably reduce its running costs, could be successfully delivered.
NS&I was found by the MPs to have no workable plan and claimed the bank lacked the skills to deliver it.
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