City law firms may help to fund the Ministry of Justice (MoJ) under new proposals to pool all client money into a nationwide account.

A joint Bar Council and Law Society committee is debating plans to create a single account into which all firms would be obliged to deposit client money, with a percentage of the interest accrued siphoned off by the Government.

One Crown Office Row's Guy Mansfield QC and Clifford Chance litigation partner Simon Davis will co-chair the committee for the Bar Council and Law Society respectively, with other members including Chancery Bar Association chairman Michael Todd QC as well as representatives from insurers and banks.

Options being considered broadly follow the French mandatory 'Carpa' system, whereby client money is pooled into one overnight national client account.

With the MoJ facing cuts of £325m, the money raised by the scheme could be used to fund civil legal aid cases or commercial litigation cases.

Bar Council chairman Nicholas Green initially floated the idea with the Conservative shadow justice team and, since the election, has continued discussions with legal aid minister Jonathan Djanogly.

The committee is expected to report its findings to Chancery Lane and the Bar Council later this year before recommendations are presented to the Government.

Commenting on the move, DLA Piper chief financial officer Paul Edwards said: "The funding attraction to the Government in these challenging times for the UK are clear. However, the idea raises a number of issues, not least who would take responsibility for the client money if the fund failed."