The monitoring panel is made up of senior Department for Business and Treasury officials and representatives from the Bank of England.

It has already reached an agreement with the five main banks to get access to data on availability, risk and overall cost of lending to small businesses, as well as with the British Bankers' Association to revise its Statement of Principles on how banks and businesses work together.

The panel will now work with banks on an individual basis about how they will provide information on their lending practices.

Mr Mandelson said: "It is critical that we understand what finance is available for small businesses and this monitoring panel will give us greater insight into the situation at ground level.

"I want this forum to make a difference. We have opened up a dialogue between SMEs and banks, and we will continue to work together to make sure we have the resources in place to see UK plc through this difficult economic climate."

The news follows a £4bn funding package for small businesses, announced by Chancellor Alistair Darling, to be made available over the next three years to restore credit levels to those of 2007.

The Federation of Small Businesses (FSB) has urged the government to make sure banks access the funding and make it available to small businesses.

However, the BBC's business editor Robert Peston recently noted in his blog that he had been contacted by a multimillionaire who claimed a "leading British bank was offering to pay him almost 7% interest for his cash", despite the 1.5% rate cut.

If banks are borrowing at this rate, they're hardly likely to be lending at a lower rate, he argued.

A recent survey by the FSB put banks as one of the biggest barriers to small businesses accessing funding.

Gary Packham, an author of the report and Head of Enterprise at the University of Glamorgan where the report was compiled, said: "These findings illustrate that action must be taken immediately for small businesses to gain access to vital funds to ensure their growth and survival.

"People often do not realise that small businesses are the backbone of the economy, employing 13.5m people and contributing more than 50% to UK turnover, therefore it is vital that this sector is given the necessary support and backed up by fair and flexible credit."