LONDON, May 31 Reuters The British government has sold 1.24 billion pounds 1.58 billion worth of shares in NatWest Group back to the lender, it said on Friday, decreasing its stake to around 22.5 from nearly 26 as it looks to end its ownership of the bank.

The transaction also comes as Britain39;s Treasury department confirmed it had shelved a mooted plan to sell shares to the general public, until after the July 4 general election.

A retail offer will not happen during the election period, a Treasury spokesperson told Reuters on Friday, confirming media reports last Sunday.

The deal is the latest step in NatWest39;s nearly twodecade return towards private ownership after its state rescue during the 2008 financial crisis, in contrast with the U.S. which had sold its major investments in rescued banks by 2011.

The state39;s plan, which involves selling shares in the market and runs until August 2025, had not been paused in connection with the offmarket purchase, the government said on Friday. Finance Minister Jeremy Hunt has committed to return NatWest to full private ownership by the end of 2026.

The Londonlisted bank bought back 392 million shares from the government in an offmarket purchase at 316 pence a share, as part of its existing contract with the state.

Shares in NatWest were up 0.35 at 317 pence by 1030 GMT on Friday. They have gained about 45 this year.

The government39;s stake in the former Royal Bank of Scotland, which was bailed out in 2008 at the…