LONDON: British banks have total exposure to state-owned Dubai World of about five billion dollars, making them the biggest foreign creditor group of the crisis-hit conglomerate, a report said Thursday.

The Royal Bank of Scotland was the most exposed of British lenders, with up to 1.2 billion pounds, according to the Financial Times, quoting unnamed sources.

HSBC, Standard Chartered and Lloyds Banking Group have exposure of about one billion dollars each, the newspaper said.

However the British banks are thought to have much of their lending focused on still-functioning parts of Dubai World, including ports operator DP World and Jebel Ali Free Zone.

Consequently, of the 26 billion dollars of Dubai World debt being restructured, RBS's exposure is about 700 million dollars and Standard Chartered's 350 million dollars -- far less than many feared, it said.

The banks declined to comment.

Global financial markets were rocked after Dubai World last week asked to halt payments on its 59 billion dollars debt.

The conglomerate this week said it wants to talk to holders of 26 billion dollars of its debt and may sell some of its assets around the world.

The newspaper report comes as Dubai World creditors on Wednesday began formulating a plan for negotiating a restructuring of the debt to lenders and bondholders, Dow Jones newswires reported, citing unnamed sources.

Bank creditors, which include the British lenders, are expected to appoint financial services firm KPMG as advisers, it said.