The Bank of England (BoE) has confirmed it will continue to use animal fat in its new bank notes - despite calls from some vegan and religious groups to remove it.
New £5 and £10 notes contain the fat, but many had hoped it would be replaced with a plant-based fat in the upcoming £20, which is set to be released in 2020.
The Bank said it 'had not taken the decision lightly'.
Production of the £20 note was put on hold, while the BoE researched alternatives to tallow - including palm oil and coconut oil, but it was not satisfied with either of these options, claiming environmental groups raised questions over the sustainability of these materials.
The Bank launched a consultation into the notes. More than 3,500 people responded, 88 per cent objected to the use of tallow, 48 per cent objected to the use of palm oil, and 31 per cent objected to both.
The BoE also looked at the cost of producing the new polymer notes, claiming that their longer life span means they don't have to be replaced as regularly, and therefore are more environmentally-friendly, as well as cheaper.
The statement said: "The Carbon Trust has certified that over their full life cycle, the carbon footprint of a £5 polymer banknote is 16 per cent lower than the £5 paper banknote."
Changing to the new production methods is estimated to cost around £16.5m over the next 10 years.
The Bank added that tallow is used in a number of everyday items already.
It said: "During our research and discussion with manufacturers and consultants, we were informed that animal-derived additives are used extensively in the many different types of plastics found in a wide range of household goods used on a regular basis, eg in cosmetics, plastic carrier bags, household detergent bottles, and car parts.
"They are also used in the production of plastics commonly used in alternative payment mechanisms, eg debit and credit cards and mobile phones.
"The animal-derived chemical additives are typically from tallow, a by-product mainly from livestock farming."
It concluded by saying it hadn't taken the decision 'lightly'.
The statement said: "The Bank fully recognises the concerns raised by members of the public, both prior to and during the consultation, and has not taken this decision lightly.
"The Bank also understands that the decision it has reached may not address the concerns of all parties, but in making this decision, the Bank has considered very carefully the relevant factors and taken into consideration all of its objectives, including its responsibility to maintain confidence in the currency through the issuance of high quality, secure banknotes and achieve value for money for taxpayers."
A spokesperson from The Vegan Society said: "Today’s announcement that tallow will continue to be used in the production of future banknotes is disappointing to the UK’s fast-growing vegan community who, for strongly held ethical reasons, aim to live without the use of any animal products.
"The Vegan Society met with Bank of England when this problem initially emerged to discuss our concerns and the way forward, and our views were taken into account when reaching this decision.
"We hope that the Bank of England will keep this matter under review and find a solution that is compassionate, sustainable and acceptable to vegans and other people seeking to avoid animal products."