The former boss of RBS has been spared a court appearance after shareholders behind a multi-million pound lawsuit settled their claim against the lender.

At a hearing at the High Court in London on Wednesday, a judge was told a settlement deal had been agreed by 87% "by value" of claimants.

Jonathan Nash QC, for the investors, said it was anticipated the remaining undecided 13% would also accept the offer.

The settlement means the bank's former chief executive Fred Goodwin - who was stripped of his knighthood following the bank's near-collapse - will escape having to answer questions over the events leading up to the UK Government's £45.5bn bailout nine years ago.

Mr Nash applied to Mr Justice Hildyard for the trial to be "vacated" in the light of the latest development.

His application was supported by a QC representing RBS.

The judge acceded to the request but left the door open for "restoration of the hearing" if negotiations failed to reach full settlement and some claimants decided they wished to pursue the litigation in court and had the means to do so.

The legal action centred on a rights issue overseen by Goodwin in April 2008, when RBS asked existing shareholders to pump £12bn into the bank after leading a consortium that spent £49bn on Dutch lender ABN Amro.

Shareholders claimed they were left nursing hefty losses following the cash call after RBS shares plunged 90% and the Government was forced to step in with a bailout when the deal turned toxic.

Mr Justice Hildyard said that in order for a trial to be held in the future "the court would require to be persuaded that further deployment of very considerable resources was justified".