* Settlement expected on Tuesday or Wednesday - sources
* RBS expected to agree combined deal with U.S., UK
By Matt Scuffham and Huw Jones
LONDON, Feb 1 (Reuters) - Royal Bank of Scotland will next week agree a settlement with U.S. and Britishauthorities for its part in a global rate rigging scandal,sources familiar with the situation told Reuters.
The bank is expected to be fined between 400 and 500 millionpounds ($793 million) for the attempted rigging of the Londoninterbank offered rate (Libor) and other benchmark interestrates. Details of the punishments will be revealed on Tuesday orWednesday, the sources said.
RBS and the UK's Financial Services Authority (FSA) declinedto comment.
RBS, which is 81 percent owned by the British taxpayer, willbe the third bank after Barclays and UBS tosettle with regulators investigating the affair.
RBS's punishment will be greater than the $450 million finespaid by UK rival Barclays, but well short of the record $1.5billion fines handed out to Switzerland's UBS.
More than a dozen banks around the world have beenscrutinized by regulators as part of an investigation into thesuspected rigging of interbank rates, which are used to pricetrillions of dollars of financial instruments.
RBS hopes to save over 100 million pounds to help pay thefines by slashing bonuses for its investment bankers, a sourcefamiliar with the situation told Reuters in January.
The bank is also expected to part company with JohnHourican, head of RBS's investment bank, at the time of thesettlement.