Britain's leading institutional investors could join forces to bypass investment banks in a protest over the fees they charge for rights issues, The Times reported.

Some institutions are considering options to take control of rights issues because they are frustrated by high underwriting fees and deep-discount cash-raising, according to the report, which cited the head of UK equities for one of London's biggest long-term shareholders.

The report said that before this year's round of rights issues, banks charged fees of about 2 percent and paid institutions about 1.25 percent for sub-underwriting. But, it said, fees of 3.5 percent were becoming increasingly common, while the sub-underwriting fees that institutions would receive had increased to only about 1.75 percent.

(Reporting by Rhys Jones)