Royal Bank of Scotland and the Treasury are preparing to lobby the European Commision to allow the taxpayer-controlled bank more time to sell 316 branches after a deal with Santander UK collapsed.
Virgin Money and the private-equity group JC Flowers are both looking at reviving offers they put forward before losing out to Santander two years ago.
The current deadline for a sale is by the end of 2013, but RBS is looking to be allowed to reach an agreement on a deal which could complete in 2014.
It will argue that it needs more time to complete a sale as decreed by the European Union and is also pointing out that EU rules on state aid for banks have altered in the five years since it received £45bn of taxpayers' money.
Shares in RBS initially fell by as much as 4 per cent, before closing down 2.8p at 268.1p.
Sir Philip Hampton, the chairman of RBS, is likely to spearhead negotiations with the EU alongside Greg Clark, Financial Secretary to the Treasury.
Mr Hampton said: "What's changed since the original decision is the climate around state aid. The commission has been much, much more flexible. It used to be a pretty severe regime but they are making different judgements.
"The UK retail banking market is more competitive now than it has been for decades."
In March, Germany's Commerzbank, which received an €18.2bn (£14.6bn) bailout in 2008, was let off an earlier order by the commission that it must sell its property finance business. But analysts point out that if RBS is let off the hook on selling branches, it could anger Lloyds Banking Group, which was forced to sell more than 600 branches to Co-op Bank.
Stephen Hester, RBS's chief executive, has asked the investment bank UBS to revive the sales process and to look again at an initial public offering of the business, which could see it resurrect the name Williams & Glyn's, a brand previously used for small business banking. Analysts said a new sale is likely to fetch £500m to £1bn less than the £1.65bn which Santander originally offered.
However, RBS said that since the branches it is being forced to sell are highly profitable, so it actually benefits from each day it continues to own them.
Meanwhile RBS has suspended its head of rates trading Jezri Mohideen, according to Bloomberg – the first senior manager to be put on leave as part of its investigation into Libor rigging allegations. Mr Mohideen has previously denied pressuring colleagues to lower RBS's submissions to the Libor-fixing committee.