Britain backs off ordering break-up of RBS: reports

London (AFP) - The British government is likely to stop short of ordering the break-up of the state-rescued Royal Bank of Scotland (RBS) before returning it to the private sector, media reports said on Sunday.

Finance minister George Osborne is due to receive a final report from Treasury officials this week recommending against the most radical option mooted for the bank, the Sunday Times said.

Instead, RBS would be forced to commit to getting rid of tens of billions of pounds (dollars, euros) of problem loans more quickly, before the government begins selling off part of its 81-percent stake starting late next year.

Sky News also reported that Osborne will finalise his plans for the future of RBS this week, following recommendations made by investment bank Rothschild which focus on "internal surgery" rather than a wholesale break-up of the group.

Both reports said that RBS would likely cut back even further its investment banking operations, which could see significant job losses.

RBS is due to release its third quarter results on Friday.

A spokeswoman for the Treasury told AFP she could not comment on the reports.