Business Secretary Vince Cable would not be drawn on whether the government should reject any attempt by RBS to exceed the EU bonus cap but urged the bank to "show restraint", during an interview with ITV News.
He told Deputy Political Editor Chris Ship that the bank, which is 81% owned by the taxpayer, had not so far come forward with any propositions on bankers' bonuses.
Under EU laws, a bonus awarded to a banker that is over double their annual salary has to be approved by shareholders.
As Chancellor, Mr Osborne is effectively the bank's main shareholder.
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The chancellor now faces the prospect of forming a minority government or calling for a snap election.
The 73-year-old said a return is unlikely "given the politicised atmosphere that seems to have afflicted our set."
Chancellor Philip Hammond said the UK will make a financial proposal to the EU in the next three-and-a-half weeks.