Shares in the Royal Bank of Scotland rose by more than 6% on Tuesday on rumours that the UK government may be about to sell a stake in the bank to overseas investors.

The BBC reported that up to a third of the government's 82% stake in RBS could be up for sale to sovereign wealth funds in Abu Dhabi.

The deal could see the Treasury sell its stake at a loss, raising the prospect of angry protests if the exchange does go through.

Sky's City editor Mark Kleinman said the proposed price for the sale could be around 32p per share - far less than the 49.9p that the government paid in 2008-9.

In total the government has £45.5bn invested in RBS, which was brought to the point of bankruptcy after its takeover of ABN Amro.

The news channel reported talks between the Treasury, UK Financial Investments and the Abu Dhabi royal family had been underway for "months".

The Reuters news agency also said that the talks with the Abu Dhabi royals were underway.

It quoted a source as saying that "it is too early to say" whether the family will invest in RBS.

Chris Leslie MP, Labour’s Shadow Financial Secretary to the Treasury, said yesterday: “It’s vital that taxpayers get back the money they invested in RBS.

"We mustn’t have another rushed sale by George Osborne, like the loss-making sell off of Northern Rock, which leaves the British taxpayer hundreds of millions of pounds out of pocket."