BRUSSELS, Nov. 3, 2009 (Xinhua News Agency) -- The European Commission said on Tuesday it is in the final stage of negotiations with the British treasury over the restructuring of the two British banks, Lloyds and Royal Bank of Scotland, which were bailed out by the state.

The European Union's executive arm, whose function is to enforce EU rules, "is making very good progress in its contacts with the UK authorities on ensuring compliance with EU state aid rules as regards the restructuring of both Lloyds and RBS," said a spokesman.

The government in London declared earlier on Tuesday that RBS and Lloyds Banking Group had to sell assets which have a value of up to 10 percent of the troubled retail banking market. Some supplementary state aid, amounting to some 30 billion pounds (48. 88 billion U.S. dollars), comes with strings attached. The two banks will have to cut down bonuses to top staff and increase lending to businesses and individuals who were struck by the recession.

However, there are concerns among the regulatory authorities over the unfairness of such state-helped banks as other institutions, such as Barclays (NYSE:BCS) and HSBC (NYSE:HBC) , had to cope with the economic downturn without government aid.

The EU has already demanded that banks helped by the state from other European countries should offload assets to even out competition in national markets, such as Germany's WestLB and Commerzbank. RBS reported a 1 billion pounds (1.63 billion U.S. dollars) loss in the first half of the year, while Lloyds said it lost 3.1 billion pounds (5 billion U.S. dollars) in the first half. Conversely, two rivals who avoided government bailouts reported profits: 3.35 billion pounds at HSBC and 1.89 billion pounds (5.47 billion U.S. dollars) at Barclays.