Business Secretary Vince Cable yesterday said there will be a "phased approach" to setting up the bank which requires approval by the European Commission. In the meantime the government will make direct, state-aid compliant investments in green infrastructure projects from April 2012 until these can be transferred to the GIB.
Once state aid approval for the bank is granted by the EC, a GIB board will replace the advisory group.
Montague, often referred to as "the government's favourite fixer", led the Eurotunnel debt restructuring negotiations in his role as global head of project finance at investment bank, Dresdner Kleinwort Benson. In 2008, he also led the sale of East Kilbride-based British Energy to French state-owned nuclear firm EDF for 12.5 billion.
Mike Crockart, the MP for Edinburgh West MP who is involved in the campaign to establish the bank in Edinburgh, pressed the Business Secretary on when a decision will be taken on its location.
Cable said he commended the "high level of professionalism" of Edinburgh's campaign.
Crockart said: "Edinburgh's bid will be hard to beat, and it is clear the Secretary of State is taking it very seriously."