Sir Philip Hampton, the new chairman of Royal Bank of Scotland, is wielding the axe in the loss-making bank's boardroom in a determined effort to exert his authority over the troubled operation.

Seven non-executives are expected to leave the board as Hampton roots out some of the longest-standing members of a board that presided over as many as 24 acquisitions during the eight years in which ousted chief executive Sir Fred Goodwin was at the helm. The taxpayer will soon own 70% of the bank.

The dramatic clear-out of the RBS board will include the long-standing non-executive directors Peter Sutherland and Bob Scott, the senior independent director who was the main point of communication for disgruntled shareholders.

The former Treasury mandarin Sir Steve Robson is also expected to depart along with Jim Currie, Janis Kong, Charles Koch and Bill Friedrich.

Their departures will signal a major change in the management of RBS, which the former chairman Sir Tom McKillop was forced to defend last year when he declared there were "no patsies" on the board.

Three new government-approved non-executive directors will join the board as stipulated by the government as a condition for the injection of £20bn of taxpayer funds. Those appointments were being finalised last night and could be announced as soon as today.

The boardroom cull will leave only two executive directors from the Goodwin regime. Guy Whittaker, the finance director, who joined in 2006, and Gordon Pell, who runs the retail operations after joining RBS from Lloyds TSB during its hostile bid for NatWest in 2000, are expected to remain. Five of the existing non-executive directors will survive, including Colin Buchan, who has been on the board since June 2002 and who will become the longest-serving non-executive director.

Stephen Hester, the newly installed chief executive, signalled a boardroom overhaul last month when he warned that the bank was on track to record the biggest loss in British corporate history, of about £28bn. But the speed of the changes may surprise some in the City. They follow the move this week by McKillop to relinquish the chairman's seat two months earlier than planned. He is preparing to appear before the Treasury select committee of MPs next week with Goodwin and the ousted HBOS bosses Andy Hornby and Lord Stevenson.

Hester is determined to press ahead with the strategic review he embarked on when he was parachuted into RBS in November. He has already begun to unravel the strategy of his predecessors by selling off a stake in Bank of China and yesterday calling off the sale of insurance businesses Churchill and Direct Line.

RBS told the stock exchange that it was "no longer in discussions with interested parties regarding a possible disposal of the business", which Goodwin was forced to put up for auction last year in a desperate attempt to raise capital. The bank declined to comment on any boardroom changes.

Hester hinted last month that he was inclined to keep the highly regarded business, when he admitted that the profits being generated by the insurance arm and retail bank would be wiped out by £8bn of credit crunch hits on the corporate bank.

The move will help ease the uncertainty for the 17,000 people employed in the insurance operation, which includes not only Direct Line and Churchill but also Privilege, Green Flag and NIG.

RBS acknowledged that while the insurance arm had "its operating challenges", it would "exhibit more stability than our banking businesses during the current negative credit cycle".

Hester said: "It is an impressive, well-run business with great people and excellent customer franchises. It can play an important role as we return the RBS group to standalone strength." Hester is also reviewing all aspects of the RBS business, which spans the globe and has extensive investment banking business following the acquisition of ABN Amro as the credit crunch began to bite 18 months ago.

The boardroom purge should make it easier to push through change. The other executive directors on the board for much of Goodwin's tenure have already gone or are about to leave. The retirement of Larry Fish, who ran the US operations, which grew rapidly through acquisition, was already due in April, while Mark Fisher, who oversaw the integration of ABN Amro, left to join the new Lloyds Banking Group. Johnny Cameron, who ran the global markets division, has already left the board and will leave the bank later this month.