UK government support for the country's banks has fallen by half since the financial crisis to £512bn (806bn), the National Audit Office (NAO) says.
The NAO said that total guarantees, loans and equity injections from taxpayers peaked at £955bn.
However, the government agency cautioned that the Treasury would probably still be paying for its help to the banks for "years to come".
Neither did the NAO rule out the risk of the government making a loss.
The audit office said that "the most likely scenario is that there will be no overall loss on the main guarantees" in its latest annual report on the financial stability of the banks.
However, the NAO added that the current market perception of the riskiness of UK banks was comparable to the levels seen in the summer of 2008 - prior to the failure of Lehman Brothers and the global financial crisis - suggesting that they remain vulnerable to a further shock.
The Treasury originally provided £730bn of guarantees - covering new borrowing by the banks as well as their existing assets - but that potential liability has since fallen to £356bn.
The audit office also said that the Treasury continued to sit on a paper loss on its shareholdings in Royal Bank of Scotland and Lloyds Banking Group of £12.5bn as of 1 December.
The government bought up 83% of RBS and 41% of Lloyds in order to recapitalise the banks at the height of the financial crisis.
The NAO also noted that while the UK government's exposure to the banks had fallen, its cash commitments had actually risen £7bn since a year ago to £124bn.
The cost to the Treasury of borrowing that money was running at £5bn a year.
So far, £9.91bn of the cost had been recouped from fees and interest charged to the banks.
"This income will fall in future as the guarantees are removed, however, whilst the financing costs will continue so long as the share investment and loans are in place," noted the watchdog in its report.