NEW YORK/WASHINGTON (Reuters) - Citigroup Inc and the US government disagree over how much the bank should raise to repay taxpayers and talks may not finish for weeks or even months, people briefed on the matter said yesterday.

The bank and the United States have to resolve questions including how the government would shed its roughly 7.7 billion shares in the bank — worth $31 billion at current prices — and how the government would stop insuring a pool of troubled assets against loss, the sources said.

After Bank of America Corp sold $19.3 billion of shares last week and announced a plan to repay government money borrowed through the Troubled Asset Relief Programme, investors are paying close attention to other banks that may soon leave the programme.

Citigroup has much to gain from exiting TARP. The US government has a good deal of say over how it pays its top executives, for example, which could hinder the bank's efforts to retain its best employees.

But Citigroup may have more trouble paying back bailout funds than Bank of America did, because it has received more government support. The United States owns about a third of the bank's shares, after Citigroup gave a big chunk of common stock to investors in exchange for preferred shares.

The government also guarantees a portfolio of Citigroup assets against excessive losses. That portfolio stood at around $182 billion at the end of the third quarter.

The government did not own Bank of America common shares and never closed on a deal to guarantee a portfolio of the bank's assets against high losses.

Another wrinkle in Citigroup leaving TARP is the issue of profitability. The bank has been struggling to generate income from its main operations, while Bank of America has been more consistently profitable.

Although Citigroup has some of the strongest capital levels in the industry, according to measures such as tangible common equity to tangible assets, regulators want to be sure that credit losses will not eat into those those ratios.

Citigroup spokesman Stephen Cohen declined to comment, as did a spokeswoman for the US Treasury.

The Wall Street Journal reported late yesterday that Wells Fargo & Co also was looking to exit TARP, and was also wrestling with the government over how much capital to raise.

A Wells Fargo spokeswoman declined to comment.

A wide array of regulators must sign off on Citigroup's departure from TARP. Federal Deposit Insurance Corp Chairman Sheila Bair, with whom Citigroup's senior managers have clashed in the past, said last week that the Federal Reserve has been consulting with the Office of the Comptroller of the Currency and the FDIC on the big bank repayments.

Bair, who has been a sceptic of loosely underwritten government bailouts, has said the US needs to "be very careful" with allowing the repayments. Bair has insisted that the government is not going to step in with further rescues of large institutions.

Earlier this year, Citigroup chief financial officer Edward (Ned) Kelly was moved out of his spot and into a vice-chairman role, soon after he referred to the FDIC as "our tertiary regulator" in the Wall Street Journal. The FDIC had pushed for a shake up of the bank's top management.