The use of cheques has hit an all-time low, and if their decline continues at its current rate, cheques could be almost extinct by 2025, according to experts.

During 2004 a total of 2.1bn cheques were written, 7% fewer than during the previous year and well down on the 1990 peak of 3.7bn.

Based on the current rate of decline, cheques are thought to virtually disappear within the next 20 years.

Banks have come in for criticism on two fronts on cheques. Most have refused to speed up the cheque clearing process despite improvements in technology. Funds are processed in between four to seven days in the UK while it takes one or two days in some European countries.

Some banks have even extended clearing times, blaming the extra security checks needed with fraud on the rise.

Secondly, instead of improving the system, some financial institutions have attempted to phase it out.

Sole traders and smaller companies say that they are particularly dependent on cheques, with most suggesting it would be impossible to run their businesses without them.