France and Germany will call on Monday for a relaxation of global bank capital rules to prevent lending to the real economy being choked off, the Financial Times reported on Monday.

German finance minister Wolfgang Schauble and his French counterpart Francois Baroin will urge special treatment for banks that own insurance companies, according to a joint paper seen by the newspaper.

The pair will also urge important elements of the Basel III guidelines on capital requirements to be watered down to mitigate any negative effect on growth, according to the article.

The FT said the paper calls for a three-year delay to the mandatory deadline to disclose leverage ratios, a measure of bank borrowing and risk.

European institutions should agree on achieving the EU financial market regulation agenda while taking due consideration of its impact on the financing of the real economy, the draft proposal states.

The FT said the German-Franco move is likely to infuriate policymakers in London, who have been fighting hard to stop French-led attempt to dilaute the Basel III accord.

Banks across the world will have to follow Basel III accords for disclosing the size and quality of their capital safety buffers from 2013 to help reassure investors they are stable.

(Reporting by Stephen Mangan; Editing by Kim Coghill)

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