Royal Bank of Scotland (RBS.L) and two other banks have abandoned talks on restructuring Dubai Group’s $10 billion debt and threatened to bring unprecedented legal action against the investment vehicle of Dubai’s ruler, sources close to the matter said.

The walkout by RBS, German lender Commerzbank (CBKG.DE) and South Africa’s Standard Bank (SBKJ.J) at the beginning of June could prevent a deal for the entire restructuring just as an initial agreement is about to be circulated to other banks, five sources said.