The British government is in talks to sell a significant part of its stake in the Royal Bank of Scotland to Abu Dhabi, according to reports.

According to the BBC, the government has been in talks with Abu Dhabi's cash-rich sovereign wealth funds to sell a large portion of its 82 percent holding of RBS for months.

However, a report by the Wall Street Journal has dismissed the claims, citing sources close to the deal who told the paper the government is "still weighing options" and that no deal is imminent.

According to the WSJ, the government "is talking to several potential investors, there was no fixed timetable for the sale and ... no buyer had yet been selected."

In 2008, the UK government invested £45.5 billion into RBS to prevent it from collapsing, following its disastrous takeover of Dutch bank ABN Amro.

If the RBS sale were to go ahead now, the government would be taking a loss, as RBS shares - currently trading at 28 pence on Monday - are roughly valued at half the 50p per share price the Treasury paid for them four years ago.

Earlier this month, Jim O'Neil, head of market investments at RBS' state-appointed overseers UK Financial Investments, said the government would likely sell its 82 percent stake off in tranches, rather than in one lump transaction.

"Given [the] size of the stakes ... to sell it all in single transaction seems very hard to imagine," he said at the time.

Speaking to the BBC, a Treasury spokesman said the government aimed to "repair and return RBS to full health so that it is able to support the UK economy in the future, and the current strategy is working to achieve that. The government's policy has always been to return RBS to the private sector, but only when it delivers value for money for the taxpayer."