The bank's partnership with Williams began in 2005 and was renewed for a second three-year term in 2007.

RBS' extensive sports sponsorship portfolio has been the subject of intense scrutiny since the bank was bailed out by the UK government in October, with critics arguing the company could no longer support such ventures with taxpayers' money.

The move is part of the bank's plans to cut its sponsorship deals by 25% in 2009 and by around 50% by 2010, while contracts with individuals such as Andy Murray, Jackie Stewart, Zara Phillips and Sachin Tendulkar are set to come under review.

"We recognise that we are now operating in a very different economic environment and have been reviewing all of our activities since October," said Andrew McLaughlin, RBS Group Director, Communications.

"It is imperative that we respond to the reality of the situation we face and that we do so in an orderly way that respects the commercial agreements we have in place and the implications for our partners and the jobs they support.

"Throughout our relationship, Williams have shown great understanding and innovation in driving the programme forwards.

"They have been very supportive in finding ways to reduce costs over the remainder of our contract.

"This early announcement allows Sir Frank Williams and his team to plan ahead financially."

Team owner Frank Williams added: "RBS has been a great partner for this team and we are pleased to have made our contribution over the past four years to developing the RBS brand internationally.

"Thanks to the support of RBS and our many other loyal partners, we are in a strong position to ride out the inevitable challenges of the next two years."

RBS, which is expected to announce a loss of up to £28bn (€31.25bn) tomorrow, is reviewing all sponsorship activity as part of an ongoing strategic review.

The bank has cancelled trackside advertising for 2010 and hospitality costs in all RBS sponsorships have been reduced by around 90% in 2009.