EU finance ministers prepared Tuesday to take a key step towards a new bank regulatory framework with final clearance of a single supervisor regime for the eurozone.

"We are set to finally approve the Single Supervisory Mechanism today," Lithuanian Finance Minister Rimantas Sadzius said.

Once approved, the SSM will formally "enter into force in November next year," Sadzius said, as he arrived for a meeting of all 28 European Union finance ministers.

The SSM was originally supposed to start early next year but the timetable slipped amid sharp differences over its precise role and especially over how it would relate to non-euro countries.

Non-euro Britain is home to the European Banking Authority, which is supposed to draft the rules for all banks in the EU, while the SSM is to be run by the European Central Bank.

To ensure that the 17 eurozone members did not out-vote the 11 non-euro members also grouped in the EBA, London won agreement in December that there would have to be a 'double majority' in both camps for any action.

London has since won fresh assurances that this would be the case, clearing the way for the SSM.

ECB executive board member Joerg Asmussen said this means "we can now start the real work -- hire people, rent a building ... all the practical things to be ready to start working in one year."

The SSM is to be complemented by a Single Resolution Mechanism to close failing banks and a Deposit Guarantee regime protect savers.

Combined, this will provide the comprehensive, single regulatory framework meant to prevent taxpayers having to fund the disastrously expensive bank bailouts which led to years of austerity and recession in the eurozone.

The SRM however is proving even more controversial than the SSM, with many member states including powerhouse Germany reluctant to cede too much control over their banks and concerned about how it should be financed.

Sadzius said finance ministers will also "discuss today backstop arrangements" to pay for potential bank closures until the SRM begins its work, most likely in several years.

One option being discussed is to tap the European Stability Mechanism, the 500-billion-euro eurozone bailout fund which has been used to help Spanish banks.

However, it is unclear how this would work in practice and especially if a member state seeking such ESM help would also have to accept tough economic policy conditions as in a full debt bailout.

Sweden's Anders Borg said ministers "first and foremost must clarify backstops" before the ECB completes tough asset tests on the banks next year to pave the way for the SSM to begin its work.

The tests are supposed to be much tougher than previous reviews which critics say failed to pick up problems at many banks and should give a clear indication of whether they need fresh capital.

If they do, new rules require governments to progressively "bail-in" private creditors and uninsured larger depositors.

If that is not enough, then state aid is the next option.

EU Economic Affairs Commissioner Olli Rehn said last week that this would be acceptable and would not count against deficit and debt targets, giving it official blessing.

The EU finance ministers will also discuss the overall economic outlook ahead of an EU leaders summit next week, with one eye on developments in Washington as talks continue on avoiding a first ever US sovereign debt default.

Several officials, including Rehn, have voiced concern about the prospect of such a US default given fears it could plunge the global economy into a deep recession or even worse.

[Image via Agence France-Presse]