The Government is demanding control over any decisions made on the sale of any assets or management of any loans under the scheme.
But RBS chief executive Stephen Hester says the taxpayer would be better served if control of the assets remained in the hands of the bank.
Yesterday the Government announced that RBS will participate in the asset protection scheme under revised terms although Lloyds Banking Group will not.
It also confirmed that Lloyds Banking Group and RBS will be broken up and parts sold on to new players in the market.
Government says to promote greater competition in the UK banking sector, and in agreement with Commissioner Kroes, both banks are required to make disinvestments in their retail and corporate banking assets over the next four years, representing 10 per cent of their combined businesses.
To ensure these disinvestments boost competition, the Government says the assets can only be sold to small or new players in the market. The restructuring of both banks are part of the state aid requirements of the European Commission.