Osborne to announce decision on breaking up RBS GEORGE Osborne is actively looking at breaking up Royal Bank of Scotland to create a "bad bank" to house its soured loans, it has emerged - with a decision imminent. The Chancellor, who asked investment bank Rothschild in June to examine if RBS should be made to hive off its toxic assets into a separate legal entity, has made sorting out the bank's future his top priority "for the next two or three weeks." Speaking in China, Osborne said: "We are looking at the case for a bad bank, and if not a bad bank what is the alternative strategy that really gets on top of the problems in that bank and goes on being what I want it to be, which is a bank supporting the British economy." Rothschild's review is due shortly and the Treasury is understood to be considering three options for dealing with RBS's problem assets. These are: creating a bad bank inside RBS run by an independent team; following the model used by Swiss bank UBS, which created a bad bank supported by the Swiss central bank; or setting up a separate taxpayer-backed bad bank. Asset manager BlackRock, hired to analyse RBS's portfolio, is understood to have identified £50 billion to £60bn of assets to be placed into any bad bank. Advocates of a break-up have said it would leave the bank better placed to lend and support the British economy. On Friday, new RBS chief executive Ross McEwan said the government review into a possible break-up was distracting executives looking to revive the bank's fortunes. The debate you read about in the papers - and that has taken up too much time of the management team - has been about what is now a small proportion of our activity. We are taking responsibility for resolving these debates," Mc-Ewan said in a memo to staff. Osborne said there was no prospect of selling the UK government's stake in the bank, bailed out in 2008 at a cost of £45.5bn, before the next election due in 2015.