Sunday newspaper round-up: Lloyds, RBS, National Express

The body that manages the taxpayer's stakes in British banks will warn this week against any expectations of a quick-fire disposal of the shareholdings, the Sunday Telegraph has learnt.UK Financial Investments (UKFI) will say in a strategy document that it will only begin selling its shares in Lloyds Banking Group and Royal Bank of Scotland once market confidence in the banking sector has been restored. Sources close to UKFI said this weekend that some senior officials involved in managing the shareholdings believed it could take up to seven years before they can be sold in their entirety.Meanwhile, the Government is girding itself for a battle royal with the EU over threats that Lloyds Banking Group and RBS will be forced to spin off or sell parts of their businesses. City sources said: "The Government is terrified that the EU is getting ready to issue an ultimatum over Lloyds and RBS, forcing them to break up following the massive state injections of capital last autumn. This row is heating up and is likely to come to a head quite soon," the Independent reports.National Express intends to defy transport secretary Lord Adonis by extending one of its two remaining rail franchises to 2014, the company's acting chief executive has told the Observer. Ray O'Toole also insisted that the £72m penalty that the company will pay for handing back its £1.4bn contract to operate the East Coast franchise was set at a "sensible level". He said National Express was well on track to hit all of its performance targets on its East Anglia franchise.Jonathon Porritt, one of Britain's leading environmentalists, has attacked the Treasury for being "startlingly arrogant" and for dragging its feet over sustainability. This month Porritt steps down as chairman of the Sustainable Development Commission, an independent government watchdog, after occupying the role since it was founded nine years ago, the Observer reports.The Serious Fraud Office is to investigate the collapse of MG Rover, the Midlands carmaker, after a long-running government inquiry concluded there were grounds for a criminal investigation. The involvement of the SFO, expected to be confirmed by Lord Mandelson, the business secretary, in a statement to Parliament tomorrow, is the latest twist in one of the biggest corporate failures of recent years, the Sunday Times reports.Marks & Spencer is headed for a bloody battle with investors on Wednesday after it emerged that the high-street bellwether plans to ignore a big protest vote demanding the appointment of an independent chairman by July 2010 to check the power of boss Sir Stuart Rose, reports the Sunday Times.PricewaterhouseCoopers has been lined up to act as administrator to Vasanta Group, which has been hit by the withdrawal of credit insurance to key suppliers. The company could collapse as soon as this week unless it can secure new funding, according to people close to the situation, writes the Sunday Telegraph.Sir David Jones, the chief executive of JJB Sports, is embroiled in an extraordinary row over revelations he borrowed £1.5m from billionaire Mike Ashley, the boss of rival sportswear chain Sports Direct and owner of Newcastle United. The Sunday Times has obtained a letter sent by Ashley to Jones in February, in which he says the cash was sent to Jones's account at HSBC in October 2007.The Bank of England's monetary policy committee (MPC) is expected to extend its programme of quantitative easing (QE) by £25bn, though there are doubts whether it will take action beyond that. The Bank has so far committed £125bn of QE in an attempt to boost the money supply, mainly through purchases in the markets of gilts and other assets, the Sunday Times reports.City firms are drawing up schemes to help staff to dodge the new 50% rate of income tax, ahead of what is expected to be a rapid return to bumper bonuses in the Square Mile. Grant Thornton, the accountancy firm, has sent a document to clients outlining one scheme that could afford a "potential tax saving of approximately 40%", the Sunday Times reports.Leading shareholders in Legal & General are trying to derail the appointment of Dame Clara Furse, the former chief executive of the London Stock Exchange, as chairman of the insurer, a role for which she has been heavily touted. A number of top investors in the FTSE 100 firm have privately declared their "strong misgivings" about the likely hiring of Dame Clara as chairman, following her appointment as a non-executive director at the group in May, the Independent reports.Newcastle Building Society, the country's 10th largest building society, is believed to be in 'advanced' takeover talks with larger rival Skipton. If the deal with Skipton goes ahead it would create a £21bn mutual with more than 1.1m members, the Mail on Sunday reports.The Government is looking at imposing a rise in National Insurance contributions after the next Election to help fund the cost of care for the elderly, it was claimed yesterday. The controversial idea - to spare people from having to sell their homes to cover the cost of care bills in their old age - will be unveiled in a Government blueprint on long-term care for the elderly, reports said, the Mail on Sunday reports.