Change with the below html.
<asp:RadioButtonList ID="radio" runat="server" RepeatDirection="Vertical" RepeatLayout="Table"
TextAlign="Right" Style="display: block; text-align: center; width: 50px;">
<asp:ListItem Text='<img src="http://i988.photobucket.com/albums/af3/mudassarkhan/Watermark.png" alt="img1" style="width:170px"/>'
Value="1" Selected="True" />
</asp:RadioButtonList>