FTSE 100 claws back lost ground

The Footsie added 22.4 points to 5067 by mid-morning

Royal Bank of Scotland fell 7% after it said it would be forced into more sell-offs than first thought to appease European officials.

The bank - 70% taxpayer owned - shed 2.92p to 39p after it emerged that its Churchill insurance arm and parts of its investment bank were on the chopping block as well as more than 300 branches in England.

The wider FTSE 100 Index however clawed back some ground after closing at its lowest level for a month on Friday. Miners led the way as the blue-chip index added 22.4 points to 5067 by mid-morning.

RBS, which is on the verge of announcing the results of its lengthy negotiations with the European Commission and the Treasury, was hit after it said it would have to make sales "not initially contemplated".

Lloyds - also close to a deal over fundraising plans to evade a taxpayer-backed insurance scheme for toxic assets - also took a tumble. Shares lost 2.95p to 84.08p, or 3%.

Mining stocks dominated the risers board, helped by vague speculation of revived bid interest in Rio Tinto from BHP Billiton. Rio added 99p to 2792p, although the Footsie's top riser was Eurasian Natural Resources - 48.5p ahead at 882p.

In the FTSE 250, directories group Yell said enough lenders had approved its plans to restructure its £3.8 billion debt mountain.

Shares in the Yellow Pages owner cheered 3%, or 1.65p to 52.9p - after rising 13% earlier - as it said it would now press on with plans to raise at least £500 million.

Budget airline easyJet was meanwhile down 4p at 356.1p after rival Ryanair announced a big jump in profits thanks to lower fuel prices but said it would be loss-making in the second half of its financial year.

In the top flight, British Airways was down 4.7p to 177.1p ahead of heavy first-half losses expected on Friday.