By Ben woods

FORMER Royal Bank of Scotland boss Fred Goodwin is to defend his role in the lender’s collapse during the financial crisis in a court battle with shareholders.

Mr Goodwin and other former executives are in line for a public grilling as part of a £700 million lawsuit brought against the lender by 9,000 retail investors and 18 institutions in the RBS Shareholder Action Group.

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Although it has settled most of the claims out of court, RBS is now heading for a 14-week trial which begins on Monday. The disgraced former chief executive, who was stripped of his knighthood after the bank’s collapse, will answer questions over the events leading up to the taxpayer-funded £45.5 billion rescue nine years ago.

The legal action centres on a rights issue overseen by Mr Goodwin in April 2008 when RBS asked shareholders to pump £12bn into the bank after leading a consortium that spent £49bn on Dutch bank ABN Amro.

Shareholders claim they were left nursing hefty losses following the cash call after RBS shares plunged 90 per cent and the Government was forced to step in when the deal turned toxic.

Despite the bank making significant headway in resolving the dispute, it has been unable to strike a deal with the last group of shareholders, with any chance of a settlement proving a distant hope.

The bank has already settled with investors representing 87 per cent of the claims by value – but it has not admitted liability – leaving 13 per cent unresolved.

Although the court case will begin on Monday, former RBS chairman Sir Tom McKillop will not appear until June 7, with ex- finance chief Guy Whittaker giving evidence on June 13 and former head of RBS investment bank Johnny Cameron on June 30.

Mr Goodwin will be cross- examined on June 8, the day of the General Election.

The bank is legally obliged to provide lawyers for the former directors but its legal costs have been criticised, as the bill escalates towards £125m – including £6.5m defending Mr Goodwin and the ex-RBS bosses.

Three members of the Treasury Select Committee warned in April that RBS could face a parliamentary inquiry into the spiralling legal costs, which will make it one of the most costly civil defences in British history.

Labour MP Rachel Reeves said last month: “If RBS loses this case, the bank will have a lot of explaining to do to staff, shareholders and the public on why it spent a fortune on this case.”

The court case comes after Chancellor Philip Hammond admitted in April that the Government is prepared to sell its near-73 per cent stake at a loss to the public purse.

The group is also hoping for a reprieve from the European Commission, which is mulling over a plan to spare RBS being forced to sell off 300 Williams and Glyn branches in return for state aid.

There are fears, though, that the alternative £750m plan – meant to boost banking sector competition – may end up costing RBS more than the branch sale.

RBS is also yet to agree a potentially mammoth settlement with US authorities over mortgage-backed security mis-selling.

However, the bank has enjoyed a brighter start to the year after reporting last month that it had booked its first quarterly profit since 2015 at £259m.