Britain could start selling its £46 billion stake in Royal Bank of Scotland early next year, the Financial Times said today, citing bosses at the bailed-out lender.

Some officials at the bank believe a first tranche of about £5 billion could be offered, the newspaper reported.

UK Financial Investments (UKFI), the body managing Britain's £67 billion bank stakes, is not expected to sell them until they are in profit, and not before an independent commission has released a September report on whether banks should be broken up or weakened to improve competition.

"Once the uncertainty around the banking commission has been removed, I don't see any reason why a sale should not take place," the FT quoted a senior RBS official as saying.

RBS and the Treasury were not immediately reachable for comment.

Reuters