Fairfax Media can reveal that key ministers remain split on if and how to join the US$100 billion China-led Asia Infrastructure Investment Bank, nearly five months after their differences were aired in a messy public debate.

It is understood the questions will come to a head at meetings of the National Security Committee (NSC) and then cabinet towards the end of this month, with some close observers expecting to see a heavily-conditional commitment to join.

Foreign Minister Julie Bishop and her department have argued that Australia should use its bargaining power by holding out until China commits to international standards that are consistent with Australia's vision of an open, rules-based regional order.

Together with Prime Minister Tony Abbott, Ms Bishop and her department are believed to be wary of recent examples of Chinese economic, political and military coercion particularly around territorial disputes in the East and South China Seas.

Mr Abbott sided with Ms Bishop in a NSC meeting in October, saying he wanted to join the bank but only when it committed to World Bank-style governance provisions.

China is yet to deliver on the key question of whether to empower a resident board that has oversight over investment decisions, as is the case with the World Bank, the Asia Development Bank and the International Monetary Fund, sources say.

Behind the scenes, Australia has been working closely with South Korea to forge a united position on acceptable governance standards and the US and Japan have been softened their antagonism to the idea.

But the British announcement drew a withering response from the US on Thursday night, with a senior Obama Administration official complaining they had not been consulted.

"We are wary about a trend toward constant accommodation of China, which is not the best way to engage a rising power," the unnamed official told the Financial Times.

In carefully worded comments, Ms Bishop told Fairfax that the UK's announcement of its "intention to sign the AIIB Memorandum of Understanding to be a prospective founding member" would not sway Australia.

"The question of AIIB membership is a matter for each country to consider independently, taking into account individual priorities and circumstances," she said.

Trade Minister Andrew Robb, in contrast, told Fairfax Media the British announcement was a "positive development".

"I'm confident that we will end up joining," said Mr Robb. "Not every box has been ticked, but a lot of boxes have been ticked, I do feel our considerations are heading in the right direction for us to join but that decision hasn't been taken yet."

Peter Jennings, who chairs the government's experts panel on the Defence White Paper, said "countries that matter for international finance" needed to coordinate in order to set a sustainable precedent about how China should deploy its power in the region for decades to come.

"Frankly it is problem if the British have jumped ahead of a more coordinated approach to this," he said. "One can only conclude that they have done this because China represents much less of a strategic challenge to them and more of an economic opportunity."

"It means the consequences of China not behaving, for example using economic leverage in a coercive way, matters less to the UK than it does to the countries of the Asia-Pacific region."

A British official, who has been closely following the debate, said his government was split along an economic and strategic divide, just like the Abbott government, and its decision could be explained by the shifting balance of bureaucratic power.

"The UK's relationship with China is now, and has been for at least the last two years, 'owned' by the Treasury, not the Foreign Office," he said. "That explains it all."

At a press conference in Sydney, Treasurer Joe Hockey, who has been overseeing discussions with Beijing, said China had "quite obviously" improved the proposed governance structure and that decisions by New Zealand and UK to join would be influential.

"This is something that will obviously be taken into account by the government over the next few weeks as we continue our dialogue with those people behind the bank," he said.

Wu Zhenglong, a senior research fellow at the China Foundation for International Studies, said Australia was under intense pressure from the US, motivated by protecting its hegemony in the region, which had prevented South Korea and Australia from joining the AIIB so far, despite both countries having shown strong interest.

But Mr Wu said with Australia and Korea concerned over remaining outside the tent while other countries continued to join, the US would be forced to soften its stance, using its line that the AIIB should meet governance standards of similar international institutions as a face-saving way out.

"You can expect that as the United States lifts its 'ban order', that it will just be a matter of time that South Korea and Australia will join the AIIB," he said.

China's Finance Minister, Lou Jiwei, speaking to reporters on the sidelines of the National People's Congress last week, confirmed countries had until the end of the month to join as foundation members of the bank. The Beijing-headquartered bank is expected to be operational this year.

"Nations outside the region have requested participation," Mr Lou said. "I believe there are many willing to participate, including larger countries."

China has charted a course to become an alternative banker to the world, seen as a direct challenge to the incumbent roles of the World Bank and the International Monetary Fund.

Last July, it partnered with Brazil, Russia, India and South Africa to form a BRICS Development Bank, with $50 billion in capital, with the five members also announcing plans to pool $100 billion of foreign-exchange reserves for any of them to tap in the event of a crisis.

In October, China led the creation of the $100 billion Asian Infrastructure Investment Bank (AIIB), seen to rival the Japan-led Asian Development Bank, and a month later announced a $40 billion Silk Road Fund, to fund infrastructure projects in the region.

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