RBS, Barclays and Lloyds downgraded over fears government will not help them in next crisis

Royal Bank of Scotland, Barclays and Lloyds were downgraded by ratings agency Standard & Poor's on Tuesday amid fears the UK government will refuse to offer them financial support in the event of another crisis.

The trio were among six European banks to have their ratings cut by S&P following a new EU law that will force any lender that requires financial help to slash its liabilities by 8pc. Member states had to adhere to the new rules by January 1, 2015.

S&P said it was unsure how the EU legislation may operate "in practice, certainly while banks remain in a transitional phase of building buffers of loss-absorbing debt instruments".

As a result it cut Barclays to BBB from A-, RBS to BBB- from BBB+ and Lloyds to BBB from A-. Standard Chartered, HSBC and Credit Suisse were also hit by downgrades.

The EU law is part of a global effort to prevent taxpayers having to bail out banks if they get into trouble. The UK government pumped £46bn into RBS in 2008 to prevent its collapse, while Lloyds was handed £20.5bn of public money. Barclays turned to investors in the Middle East in a bid to stay afloat amid a credit crisis that crippled several global institutions, such as Lehman Brothers.

Meanwhile, S&P also said the world's 30 biggest banks will have to issue more than $500bn (£330bn) in bonds to comply with proposed global rules aimed at shielding taxpayers from the risk of future banking failures.

Leaders of the Group of 20 economies have proposed that 30 so-called globally systemic banks, including Goldman Sachs, HSBC and Societe Generale should hold a buffer of bonds equivalent to between 16pc and 20pc of their risk-weighted assets such as loans, perhaps by 2019.

The proposal was agreed in principle at a G20 summit last November, with a February 2 deadline for consultation on the detail.