It comes amid concerns about the 30-year old coin's vulnerability to counterfeiting, with an estimated 45 million forgeries in circulation.

The new coin is based on the design of the old 3d (three penny) piece, or three penny bit, a 12-sided coin in circulation between 1937 and 1971.

A competition will be held to decide the image on one side of the coin.

The Royal Mint, which believes 3% of existing £1 coins are fake, said the move would increase "public confidence" in the UK's currency and reduce costs for banks and other businesses.

The announcement comes as Chancellor George Osborne prepares to deliver his fifth Budget on Wednesday.

(BBC)