The Government's bill for propping up the banking sector has nearly halved from its peak - but still stands at a mammoth £512 billion, a new report reveals.
In its latest update on state support to the banking sector, the National Audit Office (NAO) said the figure had reduced dramatically from the £955 billion seen at the height of the financial crisis.
The outlay has eased after the repayment and closure of some bank support schemes, as well as the removal of guarantees - such as those offered to Northern Rock depositors.
However, the Government is still on the hook for support including £131 billion to Royal Bank of Scotland under the toxic asset insurance scheme, more than £70 billion for its stakes in part-nationalised players and £22 billion in loans to Northern Rock.
The NAO said while the Government would still be paying for the support for many years, the most likely scenario was that there would be no overall loss on the main guarantees, such as the asset protection scheme for RBS.
But the NAO said it was still unclear if the taxpayer would ever be able to recoup its losses on stakes held in RBS and Lloyds Banking Group - currently in the red to the tune of £12.5 billion.
The report confirmed that RBS and Lloyds have not recovered from the financial crisis at the same pace as their competitors, with shares still at a paper loss for both banks despite clawing back into profit earlier this year.
Today's findings also revealed that despite the overall reduction in total support, the Government is shelling out a mammoth £5 billion a year in interest on borrowings used to finance the bail-out support.
It took out a further £7 billion in net debt this year to finance banks, at £124 billion, after interest on borrowings and money forked out in the restructuring of nationalised Northern Rock.
Interest on bail-out borrowings is 11% of the total interest on public sector net debt, according to the NAO, although it added it was largely being offset by fees and interest received from banks in return for support.
Amyas Morse, head of the NAO, said: "The most likely scenario is that the taxpayer will not pay out on the guarantees.
"Optimism on this score should be tempered, however, with the realisation that the risk of further shocks to the financial markets and of significant loss to the taxpayer has not gone away.
"The Treasury is likely to be paying for the support it has provided to UK banks for years to come."
The NAO's conclusion offers welcome cheer, given that the Government had feared the total cost of supporting the banks stood at between £20 billion and £50 billion in 2009.
However, the eventual cost to the taxpayer is dependent on the Government offloading its stakes in RBS and Lloyds and recouping loans made to the banking sector.
Selling these shareholdings will not be easy, given that the total value is more than six times greater than the largest European sale of already listed shares, said the NAO.
It stressed the shares will need to be sold in stages, while the timing is also a moot point given potential regulatory and policy changes - such as the Independent Commission on Banking's report into competition in the sector, which could recommend breaking-up Lloyds.
The NAO also warned the Government may be called on to pump more cash into the banks before selling its stakes, given the upcoming challenges of new stringent capital reserve requirements.
It said strong banks that meet the new European requirements early may use this to secure competitive advantage, which could force the state to defend taxpayer value in banks, such as by possible future capital injections.