LONDON, April 12 (Reuters) – Britain’s financial market regulator is to conduct an investigation into the events which led to last year’s government rescue of some of the country’s leading banks, a newspaper reported on Sunday.

In October last year, the government announced it would provide up to 37 billion pounds ($54.50 billion) of taxpayers’ cash to boost the capital of Royal Bank of Scotland (RBS.L), HBOS and Lloyds TSB to see them through the financial crisis.

Lloyds TSB later took over HBOS to form Lloyds Banking Group (LLOY.L).

The Sunday Telegraph said the Financial Services Authority had approached top audit firms to invite them to bid for a mandate to help with the investigation, which it said was likely to start within weeks.

The FSA declined to comment on the report.

The newspaper quoted sources in the accounting profession as saying the FSA would look at a range of issues, including the banks’ risk management processes and the conduct of directors in the period leading up to the bailout.

It said the inquiry was expected to look at whether enough information was given to the banks’ boards and shareholders.

In January, the government was forced to throw banks a second multi-billion-pound lifeline after Royal Bank of Scotland announced the biggest loss in British corporate history for 2008. (Reporting by Adrian Croft; Editing by Matthew Jones)