* Gov't says will recover all of AIG investment
* Most of remaining funds are in AIG and auto companies (Adds details of repayment and remaining Treasury stake)
NEW YORK, March 8 American International Group (AIG.N) repaid another $6.9 billion of its bailout on Tuesday, the U.S. Treasury said.
With that payment, the Treasury said it has now recovered 70 percent of the $411 billion distributed under the crisis-era Troubled Asset Relief Program, or TARP.
AIG paid the Treasury $6.6 billion from the proceeds of its sale of shares in insurer MetLife (MET.N), shares it acquired when it sold its international unit Alico to MetLife last year. AIG paid Treasury another $300 million in funds it had retained for expenses related to the Alico deal.
After those payments, the Treasury still holds about $11.3 billion in preferred interests in AIG. It also owns about 92 percent of AIG's common stock.
At Tuesday's closing share price, the sale of that stock would generate a profit for the taxpayer of about $14.22 billion. The Treasury said it expects taxpayers to recover "every dollar" of AIG's bailout, which at one point swelled to $182 billion.
Of the TARP funds still outstanding, about 70 percent are concentrated in AIG, finance company Ally Financial and automaker General Motors. (GM.N)
Any ultimate profit on the AIG shares would help offset any possible loss from the sale of the auto businesses. (Reporting by Ben Berkowitz, editing by Matthew Lewis)