Royal Bank of Scotland is mulling a share issue of between £3-4bn to reduce its dependence on the UK government's toxic asset protection scheme (APS).The move echoes similar moves by Lloyds, as, increasingly, the APS scheme is seen as too expensive a form of insurance by bank shareholders and directors. Last week Lloyds confirmed talks were underway with the Treasury about alternatives to the scheme, possibly involving a £5bn rights issue.Negotiations about the details of RBS's APS participation have been underway for months, but it too has started to sound out its investors about a share issue to reduce its dependence on APS.RBS is 70% owned by the taxpayer, which gives it less flexibility that 43%-owned Lloyds, but if enough support is forthcoming, reports over the weekend suggested that RBS could issue preference shares or launch a rights issue.Under the ARP scheme, RBS will have to pay £19bn through the issue of non-voting shares to the government as a fee to ring fence £325bn of toxic assets. Those preference shares will increase the government's stake to 85%.Sources close to the bank described the proposed cash call plan as 'tentative' and that any equity issue would be 'modest'.The bank may also be wary of issuing new equity so soon after its previous £12bn rights issue at 200p. The money raised then disappeared almost immediately under the weight of huge asset write-downs following the acquisition of ABN Amro.