The British government said on Friday the collapse of a Santander deal to buy 316 UK branches of state-backed bank RBS was a matter for the companies, adding that it remained committed to promoting competition in the banking sector.

"This is a commercial matter for RBS and Santander," a Treasury spokesman said.

Spain's Santander agreed to buy the branches in August 2010 but completion of the deal had been delayed as the two banks struggled with technology and separation issues.

(Reporting by Matt Falloon; Editing by Gary Hill)