* Settlements could come as early as next month - paper
* Separate settlements risk dragging out process
* Reuters reported delay to settlements in October
* RBS, FSA decline to comment
LONDON, Nov 25 Royal Bank of Scotland is facing the increasing likelihood of having to settle separately with the UK and U.S. authorities investigating its involvement in the global interest rate-setting scandal, the Sunday Telegraph said.
The British newspaper said RBS is concerned it could receive a "double hit" of separate fines - one from the UK's Financial Services Authority and one from the U.S. authorities.
The bank had been hoping to agree a single collective deal, similar to the one agreed by Barclays, which became the first, and so far only, bank to settle with regulators over the allegations that traders attempted to manipulate the setting of key inter-bank lending rates such as Libor, paying fines in June totalling 290 million pounds ($464 million).
RBS said earlier this month that it wanted to settle with regulators as soon as possible, enabling the part-nationalised bank to draw a line under the affair and continue with the recovery plan being led by Chief Executive Stephen Hester.
Hester warned this month that the bank faces a "miserable day" when it is eventually punished and the danger of separate settlements is that the resulting negative publicity will be dragged out over a longer period of time.
Libor and other past mistakes are threatening to overshadow Hester's attempts to turn the bank around and get it into a shape that will make it possible for the government to start selling down the 81 percent stake which it acquired in rescuing the bank during the global financial crisis.
The bank was initially expected to settle the Libor case with regulators early in the fourth quarter. However, Reuters reported in October that a settlement had been delayed and was more likely at the end of 2012 or early next year because the authorities around the world were working to competing agendas and at different speeds.
The Sunday Telegraph reported that settlements could come as early as next month. Hester said this month that he expected details of a settlement to emerge between now and the bank's full year results next February.
RBS and the FSA declined to comment on the report.
More than a dozen banks are under investigation by regulators for suspected rigging of interbank rates used to price trillions of dollars worth of financial products. ($1=0.6246 British pounds) (Reporting by Matt Scuffham; Editing by Sophie Walker and Greg Mahlich)