A group of the biggest institutional investors in Royal Bank of Scotland are secretly plotting to find a new chairman to replace Sir Tom McKillop, according to the Sunday Telegraph.

Several senior figures in the London financial community have been approached by a group of shareholders asking them to consider becoming the new chairman of Britain's fifth biggest bank, the newspaper reported. RBS owns Coutts, the UK private bank.

The plot comes as RBS launches its controversial £12 billion rights issue this week. The bank has also decided to raise an extra £1 billion by selling its 50 per cent share of Tesco Personal Finance to the supermarket giant to further shore up its balance sheet.

RBS is currently trying to sell its insurance operations and Angel Trains leasing business.

RBS, along with Spanish bank Santander and Dutch bank Fortis, bought Dutch bank ABN Amro last year. RBS’s chief executive, Sir Fred Goodwin, has come under fire as a result of the bank’s rights issue announcement as investors believed it was a U-turn in the bank’s strategy.

Schroders, the UK investment house, is spearheading the group of rebel investors pushing hard for management change at RBS. Insiders said Morley is also at the forefront, according to the Sunday Telegraph, without naming its sources.