Darling to scale back bank costs

London: British chancellor of the exchequer Alistair Darling will scale back his estimate for the cost of bailing out Britain’s banks to no more than £10 billion (€10.99bn) from £50bn, Treasury officials said.

The reduction in the sum set aside in the Government’s accounts to pay for losses will shave about £40bn off the Treasury’s debt, now about £792bn, the officials said.

They didn’t want to be named before the formal announcement by Darling in the pre-budget report on December 9.

The change reflects a decision last month to reduce the guarantees granted to Royal Bank of Scotland Group and Lloyds Banking Group covering losses on potentially toxic assets. Prime Minister Gordon Brown has said taxpayers eventually will profit from the plan.