The Church of England is supporting a bid for several hundred branches of the Royal Bank of Scotland that are being sold by the banking company.

The church's investment managing arm, the Church Commissioners are providing funding to a consortium led by the former banker and trade minister Lord Davies that is aiming to take control of the 315 branches being disposed by the bank. The European Commission has ordered the bank to sell the branches after the bank was bailed out by taxpayer's money.

Church Commissioners bases its decisions after advice from the Church of England's Ethical Investment Advisory Group and this would mean that the customers might have the option of ethical banking if the consortium is successful in talking over the branches. The Church of England and RBS declined to comment.

Chancellor George Osborne has said that the government is aiming to break up the Royal Bank of Scotland into separate entities. The government has an 82 per cent stake in the Royal Bank of Scotland and indicated that the bank might be split into a good bank and a bad bank with troubled assets. The bank had recorded a profit but was facing high level of toxic assets and the government officials have been looking for ways to revive the bank.