Ed Miliband will call for at least two national banks to be created by 2015.
The Labour leader wants the UK's five big lending institutions - Lloyds, HSBC, Barclays, Santander and Royal Bank of Scotland - to be forced to sell off some of their branches.
"Let's break the dominance of the big five banks. Let's turn five into at least seven so there is proper choice for the consumer," he is expected to say in a speech today (9 July).
The revelations within the sector over the past two weeks have tarnished the UK's banking system and so action needs to be taken.
Relative newcomers to the market include Metrobank and Virgin Money and they could benefit from such a measure.
The Co-operative Group is due to buy over 600 branches from Lloyds - which will give it a seven per cent share - and further deals of this ilk may be advanced.
By Tony Aynsley