ROYAL Bank of Scotland is facing renewed criticism of its treatment of small businesses amid allegations that it drove some firms to collapse to buy back their assets at rock-bottom prices.

Businessman Lawrence Tomlinson, the entrepreneur in residence at the Department for Business, Innovation and Skills, said he had uncovered evidence alleging that taxpayer-backed RBS has deliberately forced companies into default to seize their properties.

Mr Tomlinson will include stinging criticism of RBS's practices in a report he will publish today.

Business Secretary Vince Cable confirmed yesterday that evidence against RBS in the report had been referred to the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).

He said: "Some of these allegations are very serious and I am waiting for an urgent response as to what actions have been taken."

Mr Tomlinson's concerns centre on the activities of Royal Bank's Global Restructuring Group (GRG) lending division, which handles loans classed as being risky.

This includes the West Register business, established in the 1990s to acquire properties from customers that have fallen into receivership, with the aim of selling them when markets pick up.

Mr Cable added: "I am, however, confident that the new management of RBS is aware of this history and is determined to turn RBS into a bank that will support the growth of small- and medium-sized businesses."

But he said he had passed Mr Tomlinson's report to Sir Andrew Large - the former deputy governor of the Bank of England, who is also publishing his full review into small business lending at RBS today.

Sir Andrew's initial findings raised concerns over "serious" allegations of poor treatment by firms in financial distress.

A spokesman for Royal Bank said: "In the boom years leading up to the financial crisis, the over-heated property development market became a major threat to the UK economy. RBS did more than its fair share to fuel this and commercial property lending was one of the key drivers of our near collapse as valuations rapidly plummeted.

"Facing up to these mistakes has been a difficult, but essential part of making RBS a safe and strong bank once again.

"That has been one of GRG's main tasks. GRG successfully turns around most of the businesses it works with, but in all cases is working with customers at a time of significant stress in their lives.

"Not all businesses that encounter serious financial trouble can be saved.

"We are already committed to an inquiry to investigate how customers are treated by RBS when facing financial difficulties and ensure that we provide them with appropriate support."