Plans to create an internal 'bad bank' at Royal Bank of Scotland will make it easier to sell off the government's stake, British Finance Minister George Osborne said on Friday.

"I think it does make it easier to sell off the bank and get our money back," Osborne said on BBC radio. He added that a selloff was unlikely to begin before the next election in 2015.

RBS , which is 81 percent-owned by the government, said on Friday it would hive off 38 billion pounds ($61 billion) of loans into a bad bank to free up capital for extra lending to the British economy.

(Reporting by William James; Editing by Steve Slater)