ROYAL Bank of Scotland has reportedly doubled its settlement offer to thousands of shareholders in a bid to avert a legal battle and prevent disgraced former boss Fred “the Shred” Goodwin being forced to explain his role in the bank’s near-collapse.

The action at the a brief High Court hearing in London was adjourned yesterday for 24 hours for settlement talks, as agreed by the claimants and defendants.

Jonathan Nash QC, for the shareholders, told Mr Justice Hildyard: “The parties are currently involved in settlement discussions and are hopeful of making progress. They have agreed that these discussions would be facilitated by allowing a further period of time for them to continue before the trial begins.”

The judge gave the go-ahead on the basis the parties agreed there should be a delay for talks and assurance was given that there was a prospect the “matter can be brought to a conclusion”.

RBS chief executive Ross McEwan is said to have told the bank’s lawyers on Sunday to offer 82p a share – almost double a previous offer – although it remains unclear whether it will be accepted by investors.

If the 14-week trial does go ahead, Goodwin and former executives are due to be questioned as part of a £700 million lawsuit brought against RBS by 9,000 retail investors and 18 institutions in the RBS Shareholder Action Group. The majority of the claims have been settled out of court.

Goodwin, who was stripped of his knighthood over the debacle, will have to answer questions about events leading up to the government’s £45.5 billion bailout nine years ago.

The legal action centres on a rights issue he oversaw in April 2008 when RBS asked existing shareholders to pump £12bn into the bank after leading a consortium that spent £49bn on the Dutch lender ABN Amro.

Shareholders claim they were left nursing substantial losses following the cash call after RBS shares plunged 90 per cent and the government was forced to step in when the deal turned toxic.

Stephen Allen, a 67-year-old shareholder, from Sandy in Bedfordshire, said he and the others were entitled to their day in court.

“My particular focus is on the non-executive directors as much as Fred Goodwin, because they were all sitting there drawing the salaries and all sorts of other things,” he said.

Allen, who inherited the RBS shares from his grandfather, said they had been reduced by about 80 per cent. He said he was fortunately in a financial position where it had not put him “out on the streets”, but added: “It’s a matter of principle as far as I’m concerned. I believe that these sorts of people take positions of responsibility on behalf of the shareholders ... and I believe the directors should carry the can.

“And all too often it’s the poor bank, and this case to a degree the taxpayer, that’s basically picking up the financial mess. In my view there should be some sort of penalty put on these directors to personally pay back some of the monies.

“I know it’s not going to happen. I’m not completely on cloud cuckoo land.”