George Osborne has pledged a £250,000 donation to the Coldstream Guards Charitable Trust, after visiting a group of Guards cycling 250 miles to raise money for wounded service personnel earlier this month.

The Chancellor personally promised the £250,000 donation, which forms part of more than £100m of Libor fines which have been pledged by the government to support the Armed Forces and other good causes.

Many of the 120 Coldstream Guards that took part in the three-day cycle ride from London to France are just back from their final deployment in Afghanistan. They are raising money for the Trust to support wounded soldiers and families.

Osborne said: “The Coldstream Guards are true British heroes. I was honoured to give the send-off to their big charity bicycle ride to raise money for their wounded colleagues and their bereaved families.

“I hope this donation helps them reach their goal. I’ve insisted that fines from City traders who’ve demonstrated the worst of values are used to support those brave soldiers who demonstrated the best of British values.”

The Libor fines were raised through fines imposed on banks for misdemeanours and attempted manipulation of financial markets.

During three tours of Afghanistan, the Coldstream Guards have suffered significant casualties, both physical and mental, as well as fatalities.