The semi-nationalised Royal Bank of Scotland has announced it is to exit a state-backed insurance scheme covering its poorer-quality assets, a significant move seen as another step towards returning the 80% state-owned lender to the private sector.
RBS will save £1.4 million a day on the Asset Protection Scheme (APS) once it leaves on Thursday, having paid £2.5 billion since signing up in February 2009.
The chancellor of the exchequer, George Osborne, said: "The government's strategy remains to return RBS to the private sector when it is value for the taxpayer to do so. Today is a step in that direction."
The APS provided cover for a portfolio of RBS assets, should the bank need help managing their riskier loans.
However, RBS never had to make a claim on APS, a strong sign that the bank was heading to recovery.
The scheme significantly boosted RBS' standing after the impact of the financial crisis and the bank's share price fell to a low of 10p in early 2009.
This gave time for the bank's new board and management to put its recovery plan into effect.
The government agreed to insure £282bn of assets when RBS formally entered the APS and those assets have since fallen to around £105bn, a reduction of 63%.
RBS chief executive Stephen Hester, said: "We all want a system in which banks will never again need to seek credit support from government in a financial crisis.
"Huge progress has been made towards that goal and our exiting the APS is a significant milestone in RBS's recovery.
"The APS has played a valuable role, buying time for the bank as we implemented change from the worrying days of 2009 to create the much stronger institution it is today."
He added: "The changes RBS needed to make after 2008 were truly radical. Much progress has been made along that road. There is much work still under way. But RBS and all who rely on us are better off for the strong progress already made."