* Slaughter & May to offer legal advice
* Review to be completed by the autumn
By Matt Scuffham
LONDON, July 3 (Reuters) - Britain's finance ministry hasappointed investment bank Rothschild to advise on thepotential break-up of part-nationalised Royal Bank of Scotland.
Finance Minister George Osborne said in June that Britainwould examine whether to split the bank up, after acknowledginga sale of the government's 81 percent stake in the bank remaineda long way off.
The Treasury said on Wednesday Rothschild would providefinancial advice on the case for transferring RBS's remainingtoxic loans into a so-called "bad bank". Slaughter & May willprovide legal advice in the review, which is expected to becompleted by the autumn.
Rothschild will receive 850,000 pounds ($1.3 million) forits advice, a source familiar with the matter said, a cost thatcould be picked up by RBS. Details of the contract will bepublished in the next three weeks.
RBS and Rothschild declined to comment.
The Treasury said more external advisors, including thosespecialising in asset valuation, would be appointed in comingweeks.
RBS, still lumbered with toxic loans from a boom-eraproperty binge in the UK and Ireland and buffeted by its role ina global interest rate-fixing scandal, remains a thorn in theside of the government and the wider economy.
In his annual address to London's financial elite, Osbornesaid RBS probably should have been split into a good bank andits soured assets hived off into a bad bank in 2008, when thelender was close to collapse.
Osborne also signaled the government's intention to startselling shares in Lloyds Banking Group.
Lloyds (LLOY)