Taxpayers may have to pay up to £103m ($134m) to cover the legal costs of former bosses of Royal Bank of Scotland, who are being sued for allegedly misleading investors.
Around 30,000 investors are claiming £4bn in damages from RBS, plus another £2bn in interest and legal fees, over allegations that the bank deliberately concealed the extent of its financial woes when it raised money from them in April 2008.
A court filing seen by the Times newspaper said RBS had run up legal costs of £86.2m, with the total rising to £103.4m once 20% VAT is accounted for.
Since the lender is 70% state-owned, taxpayers will have to indirectly foot most of the bill.
The case pertains to RBS raising £12bn from shareholders in a rights issue a few months before it was forced into effective nationalisation in 2008.
The shares issued fell to a fraction of their buying price following the bailout, and the investors who bought them have demanded compensation.
The case has been filed against the bank and four of its former directors, including ex-chief executive Fred Goodwin.
RBS has denied any wrongdoing and was reported to have offered £700m to settle the case in July, but the offer was rejected by claimants.
"They are offering pennies when we are after pounds," an unnamed lawyer involved in the negotiations told the Reuters agency.
"We are never going to meet in the middle. So we are now focused on pursuing the actions through the courts."
The case is expected to go to trial in March next year and could last for six months.
Earlier this week, RBS agreed to pay $1.1bn to a US regulator to settle claims that it mis-sold mortgage securities in the run-up to the financial crisis.
The lender does not admit fault under the terms of the settlement agreed with the National Credit Union Administration Board.