Reaction: Royal Bank of Scotland workers yesterday had �real fears� for jobs as warnings of further nationalisation in the UK banking sector emerged.

Royal Bank of Scotland workers yesterday had "real fears" for jobs as warnings of further nationalisation in the UK banking sector emerged.

The Unite union said that while it was expected there were would be redundancies if HBOS and Lloyds TSB merged, there had been reassurances there would be no wholesale jobs cuts at RBS.

But concern was still high among the 16,000-plus staff with the bank in Scotland.

Alison McLean, Unite RBS representative, said last night: "It is early days in terms of what the impact is going to be. We've been given reassurances from the bank that they want to get together with the union and engage and that there will be no wholesale redundancies.

"It is a time of uncertainty for our members. There are real fears about job security. We will be raising those issues at the highest level."

Political economists at Glasgow University said further nationalisation may be necessary and also urged against moving RBS businesses out of Scotland.

One academic said "champions" such as RBS are central to the success of Edinburgh's and Glasgow's financial districts.

The university's professor Ronald MacDonald, who is also a fellow of the Royal Society of Edinburgh, said: "It is not good news for the Scottish financial sector with two of our leading banks essentially going bust.

"I suspect we may need a more wholesale nationalisation of the banking sector. That way the government can step in and find out exactly how much toxic debt is on the books of the banks."

Professor Gabriel Talmain, director of the university's centre for economic and financial studies, said: "For people seeking individual credit it might not change that much.

"What is much more worrying is not the immediate future of the users but how these banks and the finance industry is going to look in the next few years. These are major employers and major contributors to the Scottish industry."

Garry Clark, of Scottish Chambers of Commerce, said: "RBS remains an extremely important part of the Scottish economy. The retention of headquarters and decision-making functions in Edinburgh is important in this regard."

Scottish Secretary Jim Murphy said: "The Chancellor has saved Scotland's historic banks. I am now focused firmly on preserving Scottish jobs and head office functions."

Tavish Scott, leader of the LibDems in Scotland, said: "The proposed takeover of HBOS by Lloyds TSB was conceived when no taxpayers' money was involved. That has now changed.

"HBOS should remain an independent financial institution. The government, with taxpayers' money, can now make that happen."

Grahame Smith, Scottish Trades Union Congress general secretary, said: "This partial nationalisation must mark the end of the era of banking irresponsibility."