Royal Bank of Scotland will get the go-ahead this week from government and regulators to exit the state-backed insurance scheme covering its old "toxic assets", in an early step towards reprivatisation, the Financial Times reported.

The bank should be free of the Asset Protection Scheme (APS) insurance mechanism by the end of the week, having paid the minimum fee of 2.5 billion pounds, the FT said, citing people involved in discussions.

If the bank remained in the scheme beyond Thursday, a further 125 million pounds quarterly premium would become payable, the newspaper said.

RBS, which is 82 percent owned by the taxpayer, was put into the APS after the government bailed it out during the financial crisis at a cost of 45 billion pounds.

The scheme protects the bank against major defaults on its most toxic assets.

(Reporting by Stephen Mangan; Editing by Richard Pullin)