Royal Bank of Scotland is said to be lining up the sale of 300 branches to private equity firms and institutional investors.
Business insiders suggest the bank is drawing up proposals to sell a 20 per cent stake in the branch network to one or more outside investors before trying to list the business on the stock market.
The suggestion comes just 24 hours after Prime Minister David Cameron urged the Edinburgh-based institution to speed up the overhaul of the business so that it could be returned to private hands.
Stephen Hester, the chief executive brought in to turn the finance house around, has undertaken major restructuring, including the axing of 36,000 jobs, but has yet to return it to profit and must, to comply with rules, sell 316 branches by 2014. Last autumn, RBS lined up the sale of the branches to Santander UK, but the deal fell through amid recriminations.