TAXPAYER-owned Royal Bank of Scotland (RBS) was under attack again last night after an explosive report from the City watchdog into the bank’s discredited Global Restructuring Group (GRG) revealed that top bosses were ultimately responsible for its failings.

Thousands of small businesses were referred to the GRG during the financial meltdown in 2008, but instead of being helped, they were hit with huge fees which many claimed worsened their situation.

RBS has admitted a long list of failings and launched a £400 million compensation scheme for GRG claimants, but it has consistently denied claims that senior managers knew what was happening in the unit.

READ MORE: What is RBS's GRG – and why does it matter?

However, a secret report for the Financial Conduct Authority (FCA) – leaked unredacted by campaigners online – said the toxic culture came from the top.

It named Santander’s UK boss Nathan Bostock – at the time the head of risk for RBS – as the manager responsible for overseeing the GRG. He reported directly to then chief executive Stephen Hester.

Although neither is personally criticised, the report alleges that bosses were behind a culture that put the squeeze on customers.

It states: “The dominant messages from management concerned GRG’s own commercial objectives.

“Objectives that might have mitigated adverse impacts for customers, such as the importance of ‘treating customers fairly’, the need to explore opportunities for turnaround and successful return of customers to mainstream banking were largely absent from the messages emphasised by managers at all levels.”

Alison Thewliss, the SNP’s Treasury spokesperson, said: “The behaviour of the GRG – purportedly set up to help struggling small and medium businesses – in some cases has contributed to the unnecessary liquidation of companies, with a focus purely on profit-making rather than providing business support.

“The Financial Conduct Authority report on RBS GRG, originally scheduled for publication this Friday, has now been leaked online and appears to point to an endemic and dangerous ethos of prioritising commercial goals above all else, with little or no regard given to customers, their businesses or livelihoods.

Thewliss added: “That a major financial institution, in which the UK taxpayer remains a majority stakeholder, can be allowed to behave in this way is wholly unacceptable, and serves as a stark reminder that RBS has a long way to go to repair its ailing reputation.”

Nicky Morgan, chair of the Treasury Select Committee , said the FCA had lost control of the report after being given a deadline of this Friday to publish it. The watchdog, she said, could find itself in “contempt of Parliament”, should it fail to meet the deadline.

Morgan added: “The Committee will meet when Parliament returns on Tuesday 20th February. At that meeting, I will be asking members to agree to publish the final, unredacted report under parliamentary privilege as soon as possible.”

The report, by global consultancy firm Promontory Financial Group, claims there was a general failure within GRG to balance customer welfare with the desire to make money.

It also found a recent internal GRG memo, encouraging managers to give customers enough rope to “hang themselves”, which showed attitudes that were “common” in the group.

Daniel Fallows, director of Seneca Banking Consultants, a claims management company specialising in GRG claims, said it confirmed the group engaged in widespread mistreatment of UK businesses.

He added: “The £400m redress pot set aside by RBS for victims of GRG is simply not enough when you consider the enormity of this as an issue. The review process prescribed by the bank is complex and structured to minimise the amount the bank has to repay to businesses. Customers were left powerless and vulnerable as the money-hungry bank focused on one paramount objective – clawing their hands into the assets of SMEs, destroying the livelihoods of thousands of businesses.”

Santander and Bostock declined to comment, but an RBS spokesperson said: “The report makes for very difficult reading and some of the language used by our staff in the past was clearly unacceptable.

“Although the regulator has confirmed that the most serious allegations have not been upheld, we know that the bank got a lot wrong in how it treated some customers in GRG during the crisis.”