The Financial Times newspaper said that Chancellor of the Exchequer George Osborne would implement reforms as part of a separate programme of legislation to the Financial Services Bill, which will make structural reforms to financial services regulation in the UK.
He told the Draft Financial Services Bill Committee that he would "seek a legislative slot" in the 2012-13 parliamentary session for reforms to be debated.
"The Bill may have some features of the Vickers Report, particularly around ensuring the FCA has a proper regard to competition. But we have taken the view, which is shared by Sir John, that to try and shoehorn hastily drafted clauses that would implement the ring-fencing part into this important legislation would be a mistake," Osborne said.
"We are committed to putting it in legislation, but it is more appropriate to do it with a separate piece of legislation to which we are committed."
The Chancellor had previously committed to respond to the ICB's recommendations, which include a proposal to 'ring fence' retail and investment banking activities, by the end of this year.
He stressed that the "right timetable" was needed, and that any changes to the UK banking system would not be completed before ICB head Sir John Vickers' deadline of 2019.
Banking law expert Tony Anderson of Pinsent Masons, the law firm behind Out-Law.com, said it was "entirely appropriate" that the ICB's recommendations be legislated separately.
"Given that the Government is not due to respond to the Vickers Report until mid-December and that the landscape is shifting to judgment based financial regulation it is entirely appropriate that the recommendations of the ICB are legislated separately from the Finance Bill. In any event, the Government is currently debating the European Commission's proposals to impose maximum limits on bank capital requirements. Such proposals cut across key recommendations of the ICB," he said.
"The Chancellor has made it very clear, however, that the Government is committed to implementing the ICB's recommendations during this Parliament."
The ICB was set up by the Government last year to come up with ways to make UK banking safer and more competitive, and to look at the possibility of structural reform.
In its final report (363-page / 1.9MB PDF), published in September, the ICB recommended that retail banking activities be provided by a separate subsidiary of a wider banking group which should be legally, economically and operationally distinct from the group's investment banking activities. This will make it easier for the Treasury to step in and protect customer-facing activities if a bank gets into trouble, it said.
The ICB said that banks should have until the Basel III international banking agreement comes into force in 2019 to fully implement the reforms.