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The Royal Bank of Scotland is considering suing Santander amid fears that its decision to ditch the deal buy 316 branches could cost the part-nationalised lender as much as 1 bn pounds. Lawyers and advisers at RBS are "looking at the legality" of Spanish bank's reversal after its shares fell and as much as £800m was wiped off the value of the branch deal. The bank faces additional costs of re-running the sale process, or preparing the business for a stockmarket listing, as well as additional penalities from the European Union if the deal takes longer than 2013 to complete. Shares in RBS fell 1 per cent to 268p as traders had their first chance to react to the collapse of the 1.65bn poundsdeal which emerged on Friday night, according to The Telegraph. France is sliding into a grave economic crisis and risks a full-blown "hurricane" as investors flee rocketing tax rates, the country's business federation has warned. "The situation is very serious. Some business leaders are in a state of quasi-panic," said Laurence Parisot, head of employers' group MEDEF. "The pace of bankruptcies has accelerated over the summer. We are seeing a general loss of confidence by investors. Large foreign investors are shunning France altogether. It's becoming really dramatic." MEDEF, France's equivalent of the CBI, said the threat has risen from "a storm warning to a hurricane warning", adding that the Socialist government of François Hollande has yet to understand the "extreme gravity" of the crisis, The Telegraph writes.The Government's pursuit of austerity is "fundamentally mad" and could cast a shadow over the British economy for up to 15 years, Nobel prize-winning economist Paul Krugman has warned. Mr Krugman said that there was a "clear and present risk" that George Osborne's austerity policies would damage Britain's future."The shadow won't just be cast on the present, but on the longer term," he said. "[Britain] will be a weaker economy ten years or even 15 years from now because [it has] failed to provide adequate demand now." Speaking at a debate organised by the London School of Economics, Mr Krugman also said that the fact that government borrowing had increased was not necessarily evidence that George Osborne's Plan A wasn't working, as shadow chancellor Ed Balls has argued, The Telegraph explains.The reputation of Nat Rothschild was in tatters last night after the billionaire financier resigned as a non-executive director of the Indonesian coal miner he floated in London. In his resignation letter, Mr Rothschild said he had been forced to quit Bumi plc because his Indonesian partners, the Bakrie family, were "abusing" and "oppressing" minority investors. Mr Rothschild had lent his name and his money to the task of bringing the FTSE 250-listed miner to the London stock market in 2010, promising to impose Western standards of corporate governance and to protect minority shareholders' interests. "It is a matter of great regret for me that I was a party, with our advisers, to bringing the Bakries to London," he wrote, according to The Telegraph.Only a year and a half after sinking $7.2bn into the project, BP has surrendered control of nearly half of the oil and gas exploration blocks it was developing through a joint venture with India's Reliance Industries. It bought a 30 per cent stake in Reliance's deepwater oilfields in the Bay of Bengal in February 2011, making one of the largest foreign investments in India's history in a deal billed as a cornerstone of David Cameron's plans to build closer trade ties between London and Delhi. But BP said yesterday that after a detailed appraisal by its geologists and engineers, nine of the twenty-one licence areas earmarked for possible development had been rejected because they did not contain enough oil and gas to justify the expense, according to The Times. Average pay rises for top FTSE 250 executives have been held at 3 per cent for a second successive year, in a further sign that shareholder power is taking its toll on boardroom deals. Almost a third of the constituent companies in the index gave their bosses no pay increase at all this year and, for financial services businesses, that figure rose to more than half. The chief executive of a FTSE 250 business valued at between £750 million and £1.2 billion can expect to receive an average annual salary of just under £519,000, according to Deloitte, the consultancy, The Times reportsThe future of ATH Resources, which employs more than 300 at its five Scottish open cast mines, was thrown into doubt yesterday after it called in Deloitte to look at options including restructuring or a sale of the business.The company, which has blamed a slump in coal prices for its difficulties, warned that the level of its debts meant shareholders were likely to see the value of their stakes wiped out in any rescue move for the firm. The news came just two weeks after Doncaster-headquartered company announced that it was in discussions with its key backers to secure support for a proposed refinancing plan, The Scotsman says. AB