ROYAL Bank of Scotland is deeply anxious that a proposed restructuring plan being drawn up by the European Commission and the Treasury could materially damage its ability to operate as a standalone entity.<br /><br />Sources close to the bank have warned that getting RBS back to standalone strength, a key factor in reimbursing the taxpayer for bailing out the bank, will be much harder if its profitable businesses are maimed.<br /><br />EU competition commissioner Neelie Kroes has earmarked over 300 of RBS&rsquo;s branches in England and NatWest branches in Scotland to be sold off and rebranded under the revered Williams &amp; Glyn banking name as part of a drive to increase competition.<br /><br />But RBS chief executive Stephen Hester is understood to be concerned about the possibility of divesting the bank of its insurance arm, including Churchill, Green Flag and Direct Line, and its US bank Citizens, which he last month labelled as a &ldquo;core business&rdquo;.<br /><br />Treasury sources played down talk of a detrimental impact on RBS, saying: &ldquo;We are the majority owner of this bank and we are not going to needlessly destroy value.&rdquo;<br /><br />But Angela Knight, chief executive of the British Bankers&rsquo; Association, said the crucial factor should be to allow banks to operate in a manner allowing the taxpayer to be repaid as soon as possible. &ldquo;Any changes to size or shape must have that firmly in mind,&rdquo; she said.<br /><br />The break-up announcement is expected to come mid-week, along with details of RBS&rsquo;s participation in the government&rsquo;s asset protection scheme (APS). The bank is expected to confirm it will pour around &pound;270bn of risky loans into the scheme, while the government is also preparing to inject up to &pound;26bn of capital into the bank via a B share issue, taking its stake from 70 per cent to 84 per cent.<br /><br />The announcements will coincide with a further European Commission decision on a sale of Lloyds Banking Group assets. The bank is expected to be forced to sell off its TSB bank, mortgage provider Cheltenham &amp; Gloucester and internet banking arm Intelligent Finance.<br /><br />The government is expected to pour &pound;40bn more into the bank plans.