RBS had to be rescued by the government last year
The Royal Bank of Scotland (RBS) is expected to report the biggest annual loss in UK corporate history.
RBS, which had to be bailed out by the government last November, has already warned that its 2008 losses may reach as high as £28bn.
The BBC has learned that its ex-Chief Executive Sir Fred Goodwin has begun drawing his £650,000-a-year pension.
Treasury Minister Stephen Timms said the government was looking at ways of "clawing back" his payments.
The government had to spend £20bn bailing out RBS last November, after the firm found itself over-exposed to bad US debt as the impact of the turmoil in the global banking sector intensified.
The bank, of which the government now owns 68%, is also due to detail recovery plans.
About £20bn of its total loss is expected to come from the bank having to write down the value of its assets. The current record annual loss is £14.9bn.
RBS is expected to unveil plans to sell off at least a fifth of the business, including much of its toxic debt, and detail possible additional job cuts.
News of the bank's huge loss follow the BBC's revelation about the scale of Sir Fred's pension fund, said to be worth £16m.
His decision to buy ABN Amro has been widely blamed for making RBS more vulnerable.
Labour MP John McFall, chairman of the Commons Treasury committee, said there was a "case for redress" and urged the government to scale back his pay-outs.
Conservative MP Michael Fallon said ministers should have stopped Sir Fred's pension when they took over the bank in October 2008.
"This is public money in the end - £650,000 a year for life," Mr Fallon said. "It's wrong."
Mr Timms said UK Financial Investments, which manages the government's shareholding, has been working to reduce the pension.
Earlier this month, Chancellor Alistair Darling said the government would be limiting any bonuses RBS paid to its staff.
The bank's new chief executive Stephen Hester has identified between £200bn and £300bn-worth of non essential businesses that could be sold, as the firm aims to focus instead on its profitable core retail banking operations.
It has already announced two tranches of job losses.
Earlier this month, it said it would remove 2,300 UK positions or about 2% of its 106,000 British workforce. And back in October, it announced 3,000 global job cuts.
RBS's expected 2008 annual loss compares with its £9.9bn profit in 2007 and £9.2bn profit in 2006.
The bank is further due to announce that it has agreed terms with the government over its participation in the Asset Protection Scheme.
Under the scheme, the government underwrites 90% of a bank's bad debts in return for an agreed fee.
As a result, the taxpayer will ultimately be liable.
Commentators said that RBS had been further weakened by excessive efforts to expand the business, particularly its ill-fated decision to buy ABN Amro for 71bn euros ($91bn; £63bn) in 2007.
RBS said most of its £20bn write-downs were related to the ABN Amro takeover, in which banking analysts said it paid far too much and bought at exactly the wrong time.
But international banking expert Dr Catherine Smith predicted that the announcement's impact on the markets would be marginal.
"I don't think we'll see much change in the markets," she said. "As far as the markets are concerned, it's already been factored in to most of the figures."