The Treasury owns its stake in RBS through UK Financial Investments and finance minister George Osborne, the chancellor of the Exchequer, agreed with the limited company’s desire to start the sell-off, officials said.

Britain took a 1.1 billion pound loss on its first sale of shares in Royal Bank of Scotland (RBS) (RBS.L) on Tuesday, sparking accusations from opposition politicians of an unnecessarily rushed and costly disposal.

The Royal Bank of Scotland in February said that it would end its investment banking operations in the Middle East and Africa and significantly reduce its presence in Asia and the US after posting a seventh straight annual loss past year. During the height of the financial crisis, the British government pumped 45.8 billion pounds into RBS to keep the bank afloat which led them to acquire a stake of about 80 percent. The sale reduced the government’s stake in RBS to just 73% and means that RBS has now joined Lloyds Banking Group (LSE: LLOY) in a gradual return to the private sector.

The shares are likely to be sold at a slim discount to that price, possibly at 325-330p apiece, common in such large share placings.

The price for the share sale, which was conducted on Friday, was not disclosed. The bank is back on the right road, but the government has several more rounds selling to do before it becomes a minority shareholder and the share price will remain under pressure for a number of years. “When the government stake gets down to around 20-25% and RBS is getting closer to privatisation – this is when we will see more investors start to come in”. Shares closed yesterday at £337.50.

But the governmen didn’t buy shares in RBS expecting a great investment.

In a statement, Mr Corbyn said: “It’s a disgrace that Osborne is selling off RBS shares tonight at a sizeable loss to the taxpayer”.

Last night a Treasury spokesman was claiming the initial sale of five per cent of the Government’s RBS shares would secure the “the best value for the taxpayer”. Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley and UBS Group AG managed the offering.

United Kingdom officials gave up on the idea that the bank’s shares would soon rise above the original bailout price. It still controls about 14 percent of Lloyds after reducing its shareholding in a trading plan. Nobody thinks that RBS can ever regain its former glory, but the halting progress it has made on refashioning itself as a “stronger, simpler, fairer bank”, in CEO Ross McEwan’s words, has been disappointing.

He added: “There is more work to be done but we’re determined to build a bank that the country can be proud of”.