* Settlement expected on Tuesday or Wednesday - sources
* RBS expected to agree combined deal with U.S., UK
By Matt Scuffham and Huw Jones
LONDON, Feb 1 Royal Bank of Scotland will next week agree a settlement with U.S. and British authorities for its part in a global rate rigging scandal, sources familiar with the situation told Reuters.
The bank is expected to be fined between 400 and 500 million pounds ($793 million) for the attempted rigging of the London interbank offered rate (Libor) and other benchmark interest rates. Details of the punishments will be revealed on Tuesday or Wednesday, the sources said.
RBS and the UK's Financial Services Authority (FSA) declined to comment.
RBS, which is 81 percent owned by the British taxpayer, will be the third bank after Barclays and UBS to settle with regulators investigating the affair.
RBS's punishment will be greater than the $450 million fines paid by UK rival Barclays, but well short of the record $1.5 billion fines handed out to Switzerland's UBS.
More than a dozen banks around the world have been scrutinized by regulators as part of an investigation into the suspected rigging of interbank rates, which are used to price trillions of dollars of financial instruments.
RBS hopes to save over 100 million pounds to help pay the fines by slashing bonuses for its investment bankers, a source familiar with the situation told Reuters in January.
The bank is also expected to part company with John Hourican, head of RBS's investment bank, at the time of the settlement.