Giving every taxpayer shares in RBS worth hundreds of pounds is one of the options "in play" to return the bank to private ownership, Business Secretary Vince Cable has confirmed.
Mr Cable said the Liberal Democrats backed the plan as a "sensible way" of ensuring the public got the benefit from the sale of banks into which they've sunk "enormous amounts of money".
On Saturday, it was reported that Treasury officials are drawing up plans to sell off or give away the Government's majority stake in the Royal Bank of Scotland before the next general election.
Under one proposal, all taxpayers in Britain would be given holdings valued at hundreds of pounds.
Ministers are understood to have concluded that continued taxpayer ownership of the bank has become politically "untenable".
Among the problems are rows over bankers' bonuses, Libor manipulation and the miss-selling of financial products.
They would like RBS off the Government's book by 2015.
Sajid Javid, Treasury minister responsible for RBS, confirmed the sale process could begin this year.
Chancellor George Osborne said it was "a premature discussion" but did not deny work on the options was being carried out.
Short of a giveaway, some shares could be offered to the public at a discount.
A spokeswoman for the Treasury insisted that no decisions had been taken and that its aim remained to return RBS to the private sector "at the appropriate moment" and with the best possible outcome for the taxpayer.