UPDATE 1-RBS mulls writedown as high as 7 bln stg - sources

(Releads with additional details)

LONDON, April 19 (Reuters) - Royal Bank of Scotland's board is due to meet this weekend to discuss writedowns as high as 7 billion pounds ($14 billion) and a rights issue of as much as 12 billion, people familiar with the matter said on Saturday.

The rights issue, which could be Europe's largest, comes as pressure grows on global banking giants to shore up battered balance sheets, but it would mark a U-turn for Britain's second-largest bank and the first major fundraising for a UK lender since the start of the credit crunch.

Analysts have said a capital increase for RBS, which has one of the lowest capital ratios in Europe, would likely be accompanied by higher writedowns as it sweeps its books clean.

RBS has so far suffered a relatively modest hit from toxic assets, unlike most of its U.S. and some European peers, but it has not been immune to continued market turmoil and its balance sheet has been left stretched by its leading role in the ambitious takeover of Dutch rival ABN AMRO last year.

The sources said on Saturday the bank's board would be considering writedowns of between 5 billion and 7 billion pounds, though they could also decide on lower numbers.

"It will likely be a kitchen-sink exercise. They only want to do this once," one of the sources said.

The rights issue could top 12 billion pounds, though RBS may also consider asset sales to ease the cost of shoring up its balance sheet and boosting its capital ratios.

RBS has long dismissed the need for capital raising, but sources close to the matter said on Friday it was preparing to raise cash from investors and could announce the move next week.