Britain's biggest banks are in talks to invest in a company which makes what it calls the world's toughest mobile phones as they continue to deploy a £2.5bn cash-pile established to help repair the industry's reputation.
I understand that the Business Growth Fund (BGF) is in discussions about acquiring a stake in Bullitt Group.
If the talks are successful, the banks' fund would invest several million pounds in Bullitt in return for a minority stake.
The talks with Bullitt Group come as the BGF's shareholders launch a review of the fund's performance, two years after it was set up to breathe life into smaller businesses by providing them with additional equity funding.
To date, the BGF has injected capital into companies in a range of sectors, including a pub operator, a retailer and a broadband price comparison website.
The banks, which include Barclays (LSE: BARC.L - news) , Lloyds Banking Group (LSE: LLOY.L - news) and Royal Bank of Scotland (LSE: RBS.L - news) , are expected to signal their commitment to the fund following the review.
"The shareholders are satisfied with the progress the BGF has made so far, but even if they were not, the politics of reversing their involvement would be politically disastrous," one bank executive said.
In a statement, a spokesman for the fund said: "BGF started investing in October 2011. By the end of this year we will have invested approximately £125m in 20-25 companies in all parts of the UK in a diverse range of sectors.
"This is ahead of expectations and the original business plan reflecting growing momentum and an increasing pipeline of opportunities.
"In reviewing market demand and actual performance, the BGF board and shareholders see clear scope for the business to grow very strongly in 2013 and beyond. This underpins the core aims identified in the original taskforce report."
Richard Wharton, Bullitt's chief executive, and the BGF both declined to comment on their talks.