THE UK Government has been accused of planning a “fire-sale” of the public’s share in the Royal Bank of Scotland to fund most of Philip Hammond’s £25 billion spending spree over the next five years.

However, the Office for Budget Responsibility, the independent forecaster, casts a doubt over whether or not the Treasury will get the £15bn it is hoping for.

It notes that, because the share sales will be subject to value-for-money considerations and prevailing market conditions, “there will always be a risk that sales do not take place”; as happened when the previous programme of sales was put on hold after the EU referendum last year.

The Treasury is dusting off plans to re-privatise taxpayer-backed RBS with the aim of selling £15bn of its shares by 2023.

It plans to restart share sales in RBS by the end of the 2018-19 financial year and sell off £3bn a year over five years - around two-thirds of its 72 per cent stake.

In the Budget Red Book, the Treasury said: "RBS has made significant progress on resolving its legacy issues and refocusing on serving British businesses and consumers.

"It remains the Government's objective to return the bank fully to the private sector when it represents value for money to do so and market conditions allow."

The Red Book makes clear the £3bn a year boost from the RBS sale will help fund many of the Chancellor’s Budget giveaways.

But Ian Blackford, the SNP leader at Westminster, argued that the sell-off should not take place now given the share price is currently around half the price the taxpayer paid nine years ago.

Asked if the Government was indulging in a fire-sale of RBS shares, he replied: “Of course, it is. Obviously, RBS has had a troubled time. For me, this is the wrong time to be looking at selling RBS shares. They’ve got to look forward to a period when the public, who invested through the Government in RBS, get a return on that investment.”

The Government said it now faced a £26.2bn loss on its stake in RBS, down from a previous forecast of £29.2bn in March, after a recent recovery in the value of the bank's shares.

But it will still see the Government take a hefty loss on its stake in the lender, with shares languishing well below the average 502p a share price paid at during the 2008 and 2009 bail-out at around 271p at today's prices.

The Government has had more success recouping its bail-out cash in Lloyds Banking Group, finally fully returning the bank to private hands in May at a £900m million profit on its original investment.

The Treasury has also agreed with the European Commission in September that RBS will fund and deliver a £775m package of measures designed to improve competition in Britain's banking market.

This is in return for scrapping EU requirements for it to offload more than 300 branches under the Williams & Glyn brand.

Last month, RBS posted its third consecutive quarter in the black after swinging to profit over the last three months.

The bank recorded a £392m profit for the quarter to September 30, which compares with a £469m loss in the same period last year.