AP Exclusive: Taliban offer to free US soldier

KABUL, Afghanistan (AP) ? The Taliban proposed a deal in which they would free a U.S. soldier held captive since 2009 in exchange for five of their most senior operatives at Guantanamo Bay, while Afghan President Hamid Karzai eased his opposition Thursday to joining planned peace talks.

The idea of releasing these Taliban prisoners has been controversial. U.S. negotiators hope they would join the peace process but fear they might simply return to the battlefield, and Karzai once scuttled a similar deal partly because he felt the Americans were usurping his authority.

The proposal to trade U.S. Army Sgt. Bowe Bergdahl for the Taliban detainees was made by senior Taliban spokesman Shaheen Suhail in response to a question during a phone interview with The Associated Press from the militants' newly opened political office in Doha, the capital of the Gulf nation of Qatar.

The prisoner exchange is the first item on the Taliban's agenda before even starting peace talks with the U.S., said Suhail, a top Taliban figure who served as first secretary at the Afghan Embassy in the Pakistani capital of Islamabad before the Taliban government's ouster in 2001.

"First has to be the release of detainees," Suhail said Thursday when asked about Bergdahl. "Yes. It would be an exchange. Then step by step, we want to build bridges of confidence to go forward."

The Obama administration was noncommittal about the proposal, which it said it had expected the Taliban to make.

"We've been very clear on our feelings about Sgt. Bergdahl and the need for him to be released," State Department spokeswoman Jen Psaki said. "We have not made a decision to ... transfer any Taliban detainees from Guantanamo Bay, but we anticipate, as I've said, that the Taliban will all raise this issue."

Bergdahl, 27, of Hailey, Idaho, is the only known American soldier held captive from the Afghan war. He disappeared from his base in southeastern Afghanistan on June 30, 2009, and is believed held in Pakistan. Suhail said Bergdahl "is, as far as I know, in good condition."

Donna Thibedeau-Eddy, who has spent the last few days at the Idaho home of the soldier's parents, Bob and Jani Bergdahl, said the family was hopeful.

"I was with his Mom and Dad this morning when they got the news of the exchange offer. They were ecstatic," said Thibedeau-Eddy. "They actually saw the news before they got the call from the military. Bob saw it online and said 'Jani, Donna, look at this.'"

While there have been talks before, Bob Bergdahl is putting more faith and hope into the latest developments because it appears the Taliban are taking the initiative, Thibedeau-Eddy said.

Bergdahl's parents received a letter this month from their son through the International Committee of the Red Cross. They did not release details of the letter. The soldier's captivity has been marked by only sporadic releases of videos and information about his whereabouts.

The reconciliation process with the Taliban ? seen by most as the only way to end the nearly 12-year war ? has been a long and bumpy one.

The U.S. began secret talks with the militants more than two years ago in off-and-on discussions that lasted several months.

The two sides discussed prisoner exchanges and for a brief time it appeared that the five Guantanamo Bay prisoners would be released and sent to Qatar to help further the peace process.

But Karzai, furious that he had not been told of the talks in advance, demanded that the Taliban operatives be returned to Afghanistan rather than Qatar.

Since then, the U.S. has been trying to jumpstart peace talks and the Taliban have made several offers ? including sharing power in Kabul. The Taliban have also attended several international conferences and held meetings with representatives of about 30 countries.

Afghan and U.S. officials have said the Taliban being considered for any exchange deal are:

? Mohammad Fazl, a former Taliban chief of army staff and the deputy minister of defense.

? Abdul Haq Wasiq, former Taliban deputy minister of intelligence. He was in direct contact with supreme leader Mullah Mohammed Omar during the Taliban rule, according to military documents.

? Mullah Norullah Nuri , who has been described as one of the most significant former Taliban officials held at Guantanamo. He was a senior Taliban commander in Mazar-e-Sharif and previously was a Taliban governor in two provinces in northern Afghanistan.

? Khairullah Khairkhwa, a former Taliban minister of the interior and military commander. According to military documents, he had direct ties to Mullah Omar and Osama bin Laden and was also a friend of Karzai.

? Mohammed Nabi, former chief of security for the Taliban in Qalat, the capital of the southern province of Zabul.

If the Taliban hold talks with American delegates in the next few days, they will be the first U.S.-Taliban talks in nearly 1? years.

U.S. Secretary of State John Kerry was expected in Doha ahead of a conference there scheduled for Saturday on the Syrian civil war. He was not expected to meet with the Taliban although other U.S. officials might in coming days.

On Wednesday in Washington, State Department spokeswoman Jen Psaki said the U.S. had "never confirmed" any specific meeting schedule with Taliban representatives in Doha.

Prospective peace talks were again thrown into question Wednesday when Karzai became infuriated by the Taliban's move to cast their new office in Doha as a rival embassy.

The Taliban held a ribbon-cutting ceremony Tuesday in which they hoisted their flag and a banner that evoked the name they used while in power more than a decade ago: "Political Office of the Islamic Emirate of Afghanistan." Later, the Taliban replaced the sign to read simply: "Political office of the Taliban."

At the ceremony, the Taliban welcomed dialogue with Washington but said their fighters would not stop fighting. Hours later, the group claimed responsibility for a rocket attack on Bagram Air Base outside the Afghan capital, Kabul, which killed four American service members.

The U.S. expectation had been that U.S.-Taliban talks would be followed several days later with direct talks between the Taliban and a Karzai peace delegation.

But on Wednesday, Karzai announced that his government would not participate, apparently also angered by the way Kabul had been sidelined in the U.S.-Taliban bid for rapprochement.

The Afghan president also suspended negotiations with the United States on a bilateral security agreement that would cover American troops who will remain behind after the final withdrawal of NATO combat troops at the end of 2014.

That left U.S. officials scrambling to save the talks, and Kerry spoke with Karzai in phone conversations in an effort to bring him back on board.

On Thursday, Karzai spokesman Fayeq Wahidi said the Afghan president is willing to join peace talks with the Taliban if the U.S. follows through with promises he said were made by Kerry over the phone.

Wahidi said Kerry promised Karzai that the Taliban flag and a nameplate with their former regime's name would be removed and that the U.S. would issue a formal written statement supporting the Afghan government and making clear that the Taliban office would not be seen as an embassy or government-in-exile.

"If all those assurances and commitments the U.S. had given, if we are assured that they will be fully put in place on the issue of talks in Qatar," Wahidi said, "we would see no problem in entering into talks with the Taliban in Qatar. "

A decision on whether to restart the U.S. security agreement talks would be made after those assurances, he added, referring further questions to the foreign ministry.

On Thursday, the "Islamic Emirate" nameplate had been removed from the Taliban office. The flagpole inside the compound was apparently shortened and the Taliban flag ? dark Quranic script on a white background ? was still flying but not visible from the street. Journalists gathered at the office shot images of the flag through the gaps in the walls.

The Taliban have long refused to talk to Karzai's representatives but the opening of the office was seen as a first step toward those meetings.

Suhail said the Taliban are insistent that they want their first interlocutors to be the United States. "First we talk to the Americans about those issues concerning the Americans and us (because) for those issues implementation is only in the hands of the Americans," he said.

"We want foreign troops to be pulled out of Afghanistan," he added. "If there are troops in Afghanistan, then there will be a continuation of the war."

Suhail indicated the Taliban could approve of American trainers and advisers for the Afghan troops, saying that "of course, there is cooperation between countries in other things. We need that cooperation."

He said that once the Taliban concluded talks with the United States, they would participate in all-inclusive Afghan talks.

Suhail ruled out exclusive talks with Karzai's High Peace Council, which has been a condition of the Afghan president, who previously said he wanted talks in Doha to be restricted to his representatives and the Taliban. Instead, the Taliban would talk with all Afghan groups, Suhail said.

"After we finish the phase of talking to the Americans, then we would start the internal phase ... that would include all Afghans," he said. "Having all groups involved will guarantee peace and stability."

___

Gannon reported from Islamabad, Pakistan. Associated Press writers John Miller in Hailey, Idaho, Brian Murphy in Dubai and Deb Riechmann in Washington contributed to this report.

___

Kathy Gannon is AP Special Regional Correspondent for Afghanistan and Pakistan and can be reached at www.twitter.com/kathygannon

Source: http://news.yahoo.com/ap-exclusive-taliban-offer-free-us-soldier-073132683.html

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U.S. cites Russia, China among worst in human trafficking: report

By Susan Heavey

WASHINGTON (Reuters) - An annual U.S. State Department report on Wednesday cited Russia and China among the world's worst offenders in fighting forced labor and sex trafficking, which could lead to U.S. sanctions, prompting angry rebuttals from Moscow and Beijing.

The report said Russia had failed to provide systematic safeguards for victims of trafficking. China, it said, had done too little to outlaw all forms of trafficking and punish perpetrators.

The U.S. designation drops Russia and China, already often are at odds with Washington, in the same category as North Korea and Iran.

The State Department ranks countries according to the efforts they make to fight human trafficking. Russia, China and Uzbekistan all fell to the lowest level, Tier 3.

Russia's Foreign Ministry issued a statement saying the report used "unacceptable methodology" grouping countries according to their degree of sympathy with Washington.

"In fighting organized crime, including countering trafficking, Russian authorities will never follow instructions worked out in another country, let alone fulfill conditions presented nearly in the form of an ultimatum," it said.

Russia, it said, would retaliate against any sanctions.

In Beijing, Foreign Ministry spokeswoman Hua Chunying said Washington "should take an objective and impartial view of China's efforts, and stop making unilateral or arbitrary judgments of China".

China, she told a briefing, "has achieved remarkable progress in fighting domestic and transnational trafficking".

The U.S. report acknowledged that China had taken some steps, such as vowing to work with international organizations and increasing public awareness, but said it also continued to perpetuate the problem in hundreds of its own institutions.

"Despite these modest signs of interest in anti-trafficking reforms, the Chinese government did not demonstrate significant efforts to comprehensively prohibit and punish all forms of trafficking and to prosecute traffickers," U.S. officials wrote.

The report said China's one-child policy and preference for sons had reduced the number of women in the country, generating demand for women as brides or prostitutes.

Russia's government "had not established any concrete system for the identification or care of trafficking victims, lacking any formal victim identification and referral mechanism," although there were some "ad hoc efforts," the report said.

REPORT LIKELY TO STRAIN RELATIONS

The findings are likely to further complicate relations between the United States and the two countries, already strained by the handling of the civil war in Syria and cybersecurity, among other issues.

While it was not immediately clear what the Obama administration might do given the downgrade, human rights advocates and some U.S. lawmakers urged strong steps such as imposing sanctions or withholding foreign aid.

"China has become the sex and labor trafficking capital of the world," said U.S. Representative Chris Smith, a New Jersey Republican. "Without serious and sustained action by Beijing, it is only going to get worse."

Under U.S. law, Tier 3 countries may face sanctions that do not affect trade or humanitarian assistance, such as educational funding or culture programs.

John Sifton, Asia advocacy director for Human Rights Watch, said China and Russia had been given several chances to improve their efforts to combat trafficking and protect victims.

"The question for the White House is whether they're prepared to execute the sanctions," he said. "The question for China, Russia, and Uzbekistan is whether they're prepared to make commitments in the next 90 days to avoid those sanctions."

Despite pledges to combat such crimes, countries have failed to identify tens of millions of victims, according to the report, which ranked 188 countries and territories.

Just 40,000 victims of "modern slavery" were identified last year among the estimated 27 million men, women and children who are held against their will globally, the report said.

"Despite a growing body of knowledge about victims and their needs, finding them remains a tremendous challenge," department officials wrote in their 2013 Trafficking in Persons report.

Most victims were women and girls, although many men and boys were also affected.

Human trafficking practices can range from prostitution to forced labor among migrants or domestic servitude - and children also can be victims. Perpetrators are difficult to track and largely circulate in the private economy, although cases can involve rebel groups or national authorities.

A total of 7,705 alleged perpetrators were prosecuted in 2012, leading to 4,746 convictions, a slight increase from the prior year, U.S. officials said. In 2011, there were 7,206 prosecutions and 4,239 convictions.

Overall, far more countries were downgraded rather than deemed to have improved, Sifton said.

"This is a much more negative report than years past," he said. "Russia and China rightly deserve attention, but many other countries have very serious trafficking and forced labor problems."

Countries showing improvement included the Republic of Congo, Iraq and Azerbaijan, Sifton said.

President Barack Obama last year pledged to step up the U.S. effort to target trafficking.

(Additional reporting by Gabriela Baczynska in Moscow and Terril Yue Jones in BEIJING; Editing by Bill Trott and Ron Popeski)

Source: http://news.yahoo.com/u-cites-russia-china-among-worst-human-trafficking-092119084.html

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Nevada Anger Management: LIFE IS A CELEBRATION, NOT AN ...

Intimate relationships should be pleasant experiences where there is love, mutual respect, enjoying of each other?s company and sharing of ideas, thoughts and experiences. In essence, sharing our lives.

Yet in many relationships there is anger and aggressive behavior. From where does this behavior come?

Most anger and aggressive behavior stems from our childhood. Learning the ANGRY REACTION is nearly complete by the age of two to three. We learn this from our parents and siblings. Then we carry it forward as we grow and mature into adulthood.

The aggressive behaviors of INATTENTION, INTIMIDATION, CONTROL, MANIPULATION, AVOIDANCE, INTERRUPTION, RAGE and HOSTILITY are all HURTFUL behaviors when perpetrated upon us or when we use them against others.

Either way the receiving party of these behaviors will usually respond either with AGGRESSION or with PASSIVE BEHAVIOR. If it?s aggression, it?s called ANGER. If it?s passive, it?s called AVOIDANCE.

Avoidance may also be a sign of low self-esteem and poor assertive skills.

In any event, our response to the hurtful, aggressive behavior we sense is also hurtful and aggressive behavior back at the attacking party. So at first we are victims of aggression, then we become perpetrators of aggression towards someone whom we may in fact share an intimate relationship. This back and forth behavior is your basic argument.

And this brings me back to the BLOG title above. LIFE is not an endurance contest. Sure we can fight back at our attackers using more attacks against them, by raising our voices and yelling, by even getting physical or even violent. NONE of this behavior nurtures our relationships and improves them. To the contrary, the relationships are harmed, some beyond repair. (Just look at the divorce rates!)

So how can this hurtful behavior we experience be resolved?

Our ANGER MANAGEMENT program will teach you new ways of behaving, how to respond to the attacks of others, how to stop being aggressive toward your loved ones, how to be more assertive, how to express your anger in a good and appropriate way, how to boost your self-esteem, how to improve your management of stress, how to understand your emotions and the emotions of others and how to improve your communication skills. Our program is NOT therapy but rather sskill enhancement.

Make your life a CELEBRATION not an ENDURANCE contest.

We offer anger management in group or private sessions and also privately for couples or others in sensitive occupations.

For more information, please call

Dr. Steven J. Sinert
Certified in Anger Management
Nevada Anger Management, LLC
5812 S. Pecos Road, Suite B
Las Vegas, NV 89120

702 353 1750

www.nevadaangermanagement.com

Source: http://nevadaangermanagement.blogspot.com/2013/06/life-is-celebration-not-endurance.html

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Ex-gay group Exodus International of Orlando says it will close; president apologizes to gay community

Exodus International, the Orlando-based ex-gay group has announced it will shut down and its president has apologized to the gay community.

"Our ministry has been public and therefore any acknowledgement of wrong must also be public," writes President Alan Chambers on Exodus' website. "I haven?t always been the leader of Exodus, but I am now and someone must finally own and acknowledge the hurt of others. I do so anxiously, but willingly."

Several gay groups immediately commented on Exodus' decision:

From Truth Wins Out:

?We applaud and congratulate Alan Chambers for his willingness to approach this decision with honesty, integrity and authenticity,? said Truth Wins Out?s Associate Director Evan Hurst. ?It takes a real man to publicly confront the people whose lives were destroyed by his organization?s work, and to take real, concrete action to begin to repair that damage, and to work to ensure that no more lives are destroyed by harmful, discredited ?ex-gay? therapy. We look forward to a day when we can truly consider Alan to be an ally.?

From GLAAD:

The timing comes as Exodus opened what is now to be their last conference. It also comes just one day before an episode of Our America with Lisa Ling, in which Chambers offers an apology (part of which is printed above) to a group of ex-gay survivors. This is a follow-up for Ling, who two years ago did an episode on so-called ?ex-gay? programs that featured Chambers and other ?ex-gay? practitioners.
?
"Alan Chambers, and the rest of the Exodus leadership, has fully and completely come to the realization that their so-called 'ministry' has done harm to thousands of people,? said Ross Murray, Director of News and Faith Initiatives. ?They are coming to the right decision to end that harm now."

Source: http://miamiherald.typepad.com/gaysouthflorida/2013/06/ex-gay-group-exodus-international-of-orlando-says-it-will-close-president-apologizes-to-gay-community.html

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Samsung Galaxy Mega 6.3 revisits the FCC with AT&T-native LTE

Yes, we've seen Samsung's Galaxy Mega 6.3 at the FCC before. With its second visit, however, there's something special. The extra-large phone is back as the SGH-i527, and it's carrying AT&T-native LTE that hints at a probable US carrier deal. There aren't any other visible changes in the filing, although we weren't expecting any. The real question is when this behemoth will ship to the States, assuming it ships at all -- for now, any possible AT&T launch remains shrouded in mystery.

Filed under: Cellphones, Mobile, Samsung, AT&T

Comments

Source: FCC

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Afghan leader balks at Taliban talks

KABUL, Afghanistan (AP) ? Afghanistan's president said Wednesday he will not pursue peace talks with the Taliban unless the United States steps out of the negotiations, while also insisting the militant group stop its violent attacks on the ground after it claimed responsibility for a rocket attack that killed four Americans.

Hamid Karzai's strong response and the Taliban attack deflated hopes for long-stalled talks aimed at ending nearly 12 years of war in Afghanistan, just a day after the United States and the Taliban said they would begin initial meetings in Qatar.

Karzai had said Tuesday that he would send representatives from his High Peace Council to Qatar for talks but aides said he changed his mind after objecting to the way the announcement was handled, in particular the Taliban's use of its formal name "Islamic Emirate of Afghanistan" in opening an office in Doha.

Shafiullah Nooristani, a member of the High Peace Council, told The Associated Press that the use of the name violated agreements Karzai's government had made with the U.S. and caused diplomatic issues for Afghanistan.

"The agreement was that the office should open only ? and only ? for negotiations, not as a political entity like a parallel institution to the Afghan Embassy which is already there," Nooristan said.

In an attempt at damage control, Qatar's Foreign Ministry said late Wednesday that the Taliban had violated an agreement with them to call the office the "Political Bureau of the Taliban Afghan in Doha." It was not clear from the official Qatar News Agency report, however, if the Taliban would be forced to change the name.

Karzai also suspended talks with on a new U.S.-Afghan security deal that would allow some American troops to remain in the country after the international combat mission ends in 2014 to protest the fact that his government was being left out of the initial process.

The twin statements came despite an olive branch from Barack Obama to Karzai, with the U.S. president telling reporters during a visit to Berlin that "ultimately we're going to need to see Afghans talking to Afghans."

Obama said later the U.S. had anticipated "there were going to be some areas of friction, to put it mildly, in getting this thing off the ground. That's not surprising. They've been fighting there for a long time" and mistrust is rampant. Obama said it was important to pursue a parallel track toward reconciliation even as the fighting continues, and it would up to the Afghan people whether that effort ultimately bears fruit.

Violence also cast a pall over the talks, with the Taliban claiming responsibility for a rocket attack on the Bagram Air Base that killed four American soldiers.

Taliban spokesman Zabiullah Mujahid said the insurgents fired two rockets into the base outside the Afghan capital, Kabul, late Tuesday. American officials confirmed the base had come under attack by indirect fire, a term used for mortar shells or rockets, and that four U.S. troops were killed.

Also Tuesday, five Afghan police officers were killed at a security outpost in Helmand province by five of their comrades, officials said, the latest in a string of so-called "insider attacks" that have shaken the confidence of the nascent Afghan security forces. Local official Mohammad Fahim Mosazai said the five officers had only been on the local force for three months. He blamed the killings on Taliban infiltrators, saying the gunmen escaped with the victims' weapons.

The U.S. and Taliban announced Tuesday they would begin preliminary peace talks in Qatar without the Afghan government. The expectation had been that Karzai's High Peace Council would follow up with its own talks with the Taliban a few days later but that now seems unlikely, at least in the near term.

Nooristan, however, held out hope it would still be possible.

"We are working to solve these contradictions and fix these problems and act based on the agreements we had before so the High Peace Council can go there and start the peace talks," he said.

The Taliban have for years refused to speak to the Afghan government or the Peace Council, set up by Karzai three years ago, because they considered them to be American "puppets." Taliban representatives have instead talked to American and other Western officials in Doha and other places, mostly in Europe.

Obama cautioned that the peace talks with the Taliban would be neither quick nor easy but that their opening a political office in Doha was an "important first step toward reconciliation" between the Islamic militants and the government of Afghanistan.

Following meetings with high-ranking Afghan politicians and Peace Council executive members, however, Karzai's office said they had decided not to participate at all unless their conditions were met.

"Until the peace process is completely Afghan, the High Peace Council will neither attend nor participate in the talks in Qatar," Karzai's office said in a statement.

He also said talks could not begin until the Taliban end violent attacks in Afghanistan.

"The continuation of the Taliban's message of fighting and bloodshed during the opening of this office totally contradicts the pursuit of peace," his office said.

Earlier Wednesday, Karzai said negotiations with the U.S. on what American and coalition security forces will remain in the country after 2014 have been put on hold in the wake of the announcement by the Taliban and the U.S. The deal was expected to define the future of American troops here and pave way for billions in aid to the Afghan economy. It was not immediately clear how long Karzai planned to suspend the negotiations on the agreement.

"In view of the contradiction between acts and the statements made by the United States of America in regard to the peace process, the Afghan government suspended the negotiations, currently underway in Kabul between Afghan and U.S. delegations on the bilateral security agreement," Karzai's statement said.

Karzai's deputy spokesman Fayeq Wahedi told The Associated Press that among other things, the president opposed the Taliban's use of its formal name "Islamic Emirate of Afghanistan" in opening the office ? the name it had used when it ruled Afghanistan between 1996 and 2001.

"We had already communicated that to the U.S.," he said.

In setting up the office, the Taliban said they were willing to use all legal means to end what they called the occupation of Afghanistan ? but did not say they would immediately stop fighting. They also did not specifically mention talks with Karzai or his representatives.

The NATO-led force is to be cut in half by the end of the year, and by the end of 2014 all combat troops are to leave and be replaced ? contingent on Afghan governmental approval ? by a smaller force that would be on hand for training and advising.

The U.S. has not yet said how many troops will remain in Afghanistan, but it is thought that it would be a force made up of about 9,000 Americans and 6,000 allies.

Six years ago, Afghan security forces numbered fewer than 40,000, and have grown to about 352,000 today. But questions remain if they are good enough to fight alone.

Source: http://news.yahoo.com/afghan-leader-backs-away-taliban-talks-133211624.html

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Britain faces major obstacles to RBS break-up plan

By Matt Scuffham

LONDON (Reuters) - Britain would face big obstacles to a break up of state-controlled Royal Bank of Scotland and such a step might not achieve its ultimate aim of boosting lending to the economy, analysts and investors said.

Britain's government has come under pressure to consider splitting the 82 percent state-owned bank partly because prospects for returning it to private ownership soon still seem remote five years on from its 45.5 billion pound ($71.25 billion) rescue in the financial crisis.

The plan, backed by former British finance minister Nigel Lawson and outgoing Bank of England governor Mervyn King, has gained support because it has taken longer for RBS to return to financial health than expected while lending to the economy across British banks as whole remains sluggish.

But analysts and investors believe a break up would be a costly, complex and lengthy process that would not necessarily benefit the economy or taxpayers.

"The decisions to seriously consider a break-up into good/bad bank will further increase the uncertainty about the future shape of RBS, especially as the Chancellor (George Osborne) expects the bank to support core UK businesses," said Espirito Santo analyst Shailesh Raikundlia.

One of RBS's ten biggest investors warned the move could damage the wider economy.

"RBS's record on new lending in the UK mortgage market is already very strong," the investor said. "It is possible that the capital strain of a split could produce the reverse effect from that intended, that is it could actually cause less lending to the UK economy."

Finance minister George Osborne has said the government would investigate the case for hiving off RBS's toxic loans into a "bad bank", leaving a "good bank" better placed to lend to British households and businesses. Osborne said any break-up would not involve taxpayers putting in further funds.

Both Ireland and Spain have gone down the "bad bank" route to tackle their banks' bad assets.

COST AND COMPLEXITY

The Conservative-led coalition is considering hiving off RBS assets worth between 100 billion pounds and 120 billion pounds, according to one source familiar with the matter.

Ulster Bank, owned by RBS, could have its non-core assets and commercial real estate assets moved into the bad bank following a break up, along with some UK commercial real estate assets of RBS, the source said.

Osborne, himself, had previously rejected the idea, also citing the cost and complexity involved. Critics have pointed out that it would cost billions of pounds just to buy out the bank's minority shareholders, which would have to happen before the break-up could take place.

In his annual speech to City of London financiers on Wednesday, Osborne said, with hindsight, RBS should have been broken up five years ago. He stopped short of criticizing his Labour predecessor, Alistair Darling, who was in power at the time, admitting he had not proposed such a move in opposition.

The Parliamentary Commission on Banking Standards, which was set up by Osborne to review the industry, had called on the Treasury to produce a report on the pros and cons of a break-up by September, a recommendation the Chancellor has heeded.

Osborne said Britain would establish an RBS "bad bank" if the review concluded the move would support the British economy, be in the interests of taxpayers and accelerate the bank's return to private ownership.

The review will be undertaken by the Treasury with external support and will report back by the autumn. It is not yet clear whether that support would come from individuals or a financial institution.

RBS has already undertaken a mammoth restructuring, overseen by outgoing Chief Executive Stephen Hester since its rescue, shedding some 900 billion pounds of non-core assets but it still has assets worth around 1.2 trillion pounds.

In contrast to RBS, the government has said it is ready to start selling its holding in rival Lloyds , also bailed out in the crisis, allowing it to claim partial success in returning the banks to health ahead of the next election in 2015.

(Reporting by Matt Scuffham. Editing by Jane Merriman)

Source: http://news.yahoo.com/britain-faces-major-obstacles-rbs-break-plan-155807328.html

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