Banks set for 45 billion pound rescue

By John Bowker and Ralph Gowling

LONDON (Reuters) - Britain could pump about 45 billion pounds into four troubled major banks and take big stakes as part of a recapitalisation due to be unveiled on Monday, sources familiar with the situation said.

Royal Bank of Scotland, HBOS, Lloyds TSB and Barclays were in line to receive the billions of pounds from investors and taxpayers in a bid to rescue them from the impact of the global credit crisis, said the sources, declining to be named.

Media reports said Barclays was trying to raise cash from private investors rather than the government, but that the other three banks were expected to tap into a huge cash-pile made available by the government.

The rescue plan could result in the government becoming the biggest shareholder, and even a majority investor, in Royal Bank of Scotland and HBOS -- effectively partly nationalising two of Britain's biggest banks.

Talks among the banks, government officials and regulators were due to go on through the early hours of Monday to determine how much each would need from the 50 billion pounds offered by the government last week to offset the global credit crunch.

An announcement was expected before markets open on Monday, but details were still being fine-tuned, said the sources.

Royal Bank of Scotland Group Plc may take over 15 billion pounds, HBOS over 10 billion, Barclays may seek over 7 billion and Lloyds TSB about 5 billion, according to industry sources and media reports.

The banks are expected to try and sell shares to existing investors, backed by the government, which would buy the shares not taken by investors.