Chancellor George Osborne described the sale as an important first step in returning the bank to private ownership. He said it was the right thing to do for the taxpayer and for British businesses.

But Osborne’s actions have come under fire for selling the shares below the 500p the government originally paid for them making a loss of £1.07bn on the shares sold, according to a BBC report.

Ian Gordon, banking analyst at Investec, told the BBC’s Today programme that the taxpayer was being short-changed.

He said the shares could have been sold for higher price in February when they were changing hands for 400p.

The initial sale has reduced the Treasury’s stake in RBS to 73%.

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Proceeds raised from the sale will be used to pay down the national debt.

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