MPs have urged Royal Bank of Scotland and other lenders not to withdraw financial support from troubled credit card insurer CPP fearing the loss of more than 1,300 jobs.

CPP, which insures against credit card fraud and identity theft, said on Friday it was in talks with its banks about how an overhaul of its sales procedures would affect it, following a probe by the financial regulator into alleged mis-selling.

The Sunday Times reported that RBS, Barclays and Santander had refused to renew CPP's credit facilities when they expire in March 2013.

CPP declined to comment.

We would strongly urge all involved parties to place the importance of local jobs at the forefront of any discussions with the business, Julian Sturdy and Hugh Bayley, MPs for CPP's home town of York, wrote in a letter to RBS CEO Stephen Hester and the heads of its other banks.

We firmly believe that a balanced and sensitive approach would secure such jobs and enable the organization to work through its difficulties, the MPS said, in the letter emailed on Friday and seen by Reuters.

CPP's initial estimate is that the overhaul of its sales procedures, which include explaining more clearly to customers that they have the right not to renew their policies, will cost it up to 15 million pounds in compensation and lost business.

CPP's shares have been suspended since February 20, when it warned that disproportionate changes being demanded by the Financial Services Authority after a year-long investigation threatened its viability.

The stock, which floated at 235 pence in March 2010 and last changed hands at 103 pence, will remain suspended until talks with CPP's banks have concluded, the company said on Friday.

(Reporting by Myles Neligan; Editing by Elaine Hardcastle)