Lloyds banking group is set to become Scotland's biggest financial sector employer after it was announced RBS and Lloyds were to be broken up.
Lloyds said it would employ more than 20,000 workers, and its registered office would remain at The Mound in Edinburgh.
The banking side of the slimmed-down Lloyds operation would be known as Bank of Scotland in Scotland, and Lloyds in England and Wales.
The TSB brand and the 185 Lloyds TSB branches in Scotland - all but three of which were originally TSB Scotland branches - would be sold off, along with some Lloyds TSB branches in England.
Also sold off would be the four Scottish branches of Cheltenham & Gloucester, and the Intelligence Finance internet operation, which is based in Livingston and Rosyth.
But the Bank of Scotland, which has more than 300 branches, would remain part of the group.
Life and pension brand Scottish Widows would also remain part of the group, as would Scottish Widows Investment Partnership and some specialist commercial financing operations.
Meanwhile the Royal Bank of Scotland - which currently employs about 16,000 people in Scotland - would sell off its branch network in England and Wales, and NatWest branches in Scotland.
Also to be sold off are RBS Insurance, which operates UK-wide and Global Merchant Services, the fourth biggest global card payment service.
Chancellor Alistair Darling said that under today's proposals, more private money was being put into Lloyds, reducing the Government's potential liability to Lloyds by £260billion.
But the bigger and more complex RBS, which was involved in the "disastrous" takeover of Dutch bank ABN, would still need Government insurance.
He described the 3,700 job losses announced on Monday by RBS as "a real tragedy" for those involved. Speaking in a radio interview on Tuesday morning the Chancellor said: "I don't think anyone can say the Government has been slow to put money into the banking system. We are putting £25 billion into the system just now."
Liberal Democrat leader Tavish Scott called for assurances that the slimmed-down banks will lend to business and responsible would-be home buyers "desperate" for a mortgage.
He said: "Gordon Brown and Alistair Darling forced through Lloyds' takeover of HBOS last year, ignoring warnings about job losses and the catastrophic impact on competition on the high street. Now, barely 12 months later, these centralised super banks have to be ripped apart. We need to know how much taxpayers' money was wasted on this pointless exercise."
The banking shake-up is being discussed later today at the Scottish Government's weekly cabinet meeting.
A spokesman for the First Minster said Alex Salmond and Finance Secretary John Swinney will report to fellow ministers on their recent talks with senior Lloyds and RBS staff. The shake-up has "got to be done in the right way, and it's got to be done at the right time, in a way which maximises employment and headquarters functions in Scotland", the spokesman said.
Scottish Secretary Jim Murphy said he wanted to meet "serious" investors considering buying the Lloyds and RBS assets. He also pledged to fight for "the best possible deal for Scotland" for jobs and HQ facilities. He added: "This money from the taxpayer comes with tough conditions”.
Rob MacGregor of the Unite union said: “It’s another major announcement affecting bank employees. We’re concerned that across both RBS and Lloyds Banking Group more than 25,000 employees are directly affected and potentially at risk as a result of these announcements today.
“We’re looking for answers from the government, from UKFI and also the employers about what the future holds for employees affected by the bank break-up.”
