The Bank of England said the supplier of its new £5 note is looking at "potential solutions" following criticism over the use of animal fat during the production process.
The Bank said it was "aware of some people's concerns" about traces of the derivative, known as tallow, in its polymer note since being introduced into circulation in September.
It said it was treating the concerns with the "utmost respect" and was in discussion with its supplier, Innovia.
In a statement, the Bank said: "This issue has only just come to light, and the Bank did not know about it when the contract was signed.
"Information recently provided by our supplier, Innovia, and its supply chain shows that an extremely small amount of tallow is used in an early stage of the production process of polymer pellets, which are then used to create the base substrate for the £5 note.
"Innovia is now working intensively with its supply chain and will keep the Bank informed on progress towards potential solutions."
Fury among vegetarians and vegans erupted following confirmation by the Bank that the notes contained tallow.
Doug Maw, who started a petition against its use, said he was "disgusted" a more suitable alternative had not been sourced.
Mr Maw, a 47-year-old hotel worker from Keswick in Cumbria, said: "There is no excuse for it. There has got to be other ways of making money without using animal products."
More than 100,000 people have since signed the petition.