Britain's financial watchdog refuses to publish report on RBS

(Adds more detail, committee response)

By Emma Rumney and Lawrence White

LONDON, Feb 16 (Reuters) - Britain's financial watchdog said it would not publish the full report into Royal Bank of Scotland (LSE: RBS.L - news) Group's treatment of small businesses, but instead sent a copy of the report to lawmakers on Friday.

The cross-party Treasury Select Committee had given the Financial Conduct Authority a deadline of Friday to either publish the report, which details RBS's much-criticised treatment of small business customers, or provide a copy to the committee of politicians.

The committee responded said it would meet next Tuesday to decide whether to publish the report under parliamentary privilege.

The report details how RBS, which is still 71 percent owned by taxpayers following its bailout during the 2008-9 financial crisis, prioritised profit over nursing troubled business customers back to financial health.

RBS has admitted some wrongdoing but denies the most serious allegations against it - namely that it pushed firms into bankruptcy to pick up their assets on the cheap.

The scandal has weighed on RBS's attempts to reform its image a decade on from the financial crisis. The bank will report its full-year results next week.

The FCA said it could not publish the full report, which has been widely leaked anyway, because it could not obtain consent from all those mentioned throughout.

(Reporting By Lawrence White; Editing by Keith Weir)