Royal Bank of Scotland (RBS), the struggling bank, is preparing to axe up to 3,000 staff across its worldwide workforce as it braces itself against the onslaught of the global recession.

Up to 1,000 jobs are expected to be lost in the UK, and today's latest spate of cuts brings the total number of bring the total number of British jobs lost this week to above 16,000.

Yesterday, BT underscored the arrival of the financial crisis in the real economy as it unveiled plans to cut 10,000 jobs by the end of March, following workforce reductions elsewhere at Virgin Media, Yell and GlaxoSmithKline.

RBS will reduce its workforce in its global banking and markets division, with around third of the workforce based in the UK.

RBS's retail branch network - it is the owner of NatWest in the high street - will not be hit by the expected round of cuts, which will come into effect over the coming weeks.

RBS's insurance operations, including Churchill and Direct Line, are also thought to be escaping the axe.

The banking giant employs about 170,000 across the world, with around 100,000 in the UK..

The cuts could prove controversial for the bank, which is one of a handful being part nationalised by the UK government.

RBS is poised to raise a total of £20 billion, including an issue of £5 billion of preference shares to the Treasury, in a move destined to mean the taxpayer becomes the bank's largest shareholder.

The cuts will be presided over by Stephen Hester, the bank's new chief executive, who replaced Sir Fred Goodwin.

Sir Fred was forced to stand down as part of the price of the bailout, having taking the bank to the brink with a series of acquisitions, most recently of ABN Amro, the Dutch bank.

Banking sources stressed that RBS was responding to market conditions. They said the cuts were not related to the government stake; nor were they as a result of the ABN deal.

"Everyone is doing this. You could say RBS has been a bit late," one source said.

RBS is on course to post a full-year loss, the first in its 300-year history. The bank, based in Edinburgh, lost £691 million in the first half.

Shares gained 1.9p to 54.5p.

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