The chairman of Royal Bank of Scotland (LSE: RBS.L - news) (RBS) is mounting a last-ditch effort to settle allegations that its wealth management arm mis-sold financial products to investors including the man who led London's bid to host this year's Olympic Games.
I have learned that Sir Philip Hampton approached Sir Keith Mills within the last fortnight to broach the prospect of a deal that would avoid the entrepreneur's case against Coutts reaching the High Court.
Lawyers for the two sides are expected to enter discussions about a multimillion pound out-of-court settlement in the next few days, ahead of a trial that is due to begin the following week.
The intervention by Sir Philip underlines the importance to RBS of avoiding another public denigration of the bank's reputation at a time when it is in talks to settle with regulators over the Libor rate-rigging scandal.
If the case does go to trial, documents including internal emails and messages are expected to be read in court, raising the prospect of further embarrassment for RBS, of which taxpayers own more than 80 per cent.
Sir Keith has fought a four-year campaign to retrieve millions of pounds he argues he is owed following decisions by managers at Coutts to invest in bonds issued by AIG, the US insurance giant which averted collapse during the 2008 financial crisis only with the assistance of a massive government bail-out.
Investors including Sir Keith saw their money frozen when AIG was rescued, depriving them of millions of pounds in interest, according to people familiar with the allegations.
The exact sum Sir Keith is claiming in damages is unclear, although it is understood to be in a range from in the region of £5m to about £10m.
Coutts has maintained since the case was initiated that it provided appropriate advice that the AIG bonds were low-risk rather than risk-free.
Coutts, banker to Her Majesty The Queen and one of the world's best-known affluent banking businesses, has already been fined more than £6m by the Financial Services Authority (FSA) for flouting regulations during the period in which it sold the AIG bonds.
In June, it wrote to approximately 250 wealthy customers to begin a process of offering redress following a review by Herbert Smith, the law firm. It is understood that just under 200 of them were offered compensation, although it is unclear how many accepted.
RBS has made previous attempts to settle with Sir Keith although its previous offers have fallen well short of his expectations, according to people familiar with the previous talks.
A successful businessman who founded the Air Miles and Nectar customer loyalty schemes, Sir Keith was deputy chairman of the London Games organising committee and is frequently mentioned in connection with other senior sports administration roles, including the chairmanship of the Football Association and Premier League.
People close to the case said that RBS was keen to settle and said they would be surprised if a deal could not be reached before November 26.
RBS and a spokesman for Sir Keith both declined to comment.