Hester defends the bankers doing 'essential job' for UK

Hester said: "What I have to be is a commercial animal that rescues value for the taxpayer. Our job is to try and create a bank which serves its customers well, is safe and sound and in which others will want to buy shares."

While he had great sympathy with people who were focusing on high pay differentials in this country, he tried to justify the sums RBS had to pay its top bankers. He said: "The societal issues of what people earn in different walks of life is not something I can solve. It's a political debate. I'm not a politician.

"When I was asked to take on this job three years ago I had to replace the whole senior management team at RBS and that meant recruiting skilled people from all acoss the world. We had to defuse the biggest timebomb in history in terms of banks balance sheets.

"Those people are doing a good job. I think they deserve recognition. If they do a good job, it is our task to make sure that there is a connection between the job people are doing and how they get treated."

Hester also said it would be unfair to tar all bank workers with the same brush. "When any industry has such unbridled expansion as banking did over those 20 years hubris sets in. But let's not demonise a whole industry. There are millions of people doing a good and essential job in banking."

Asked if he would work less hard if he did not get a bonus, he said: "The reason people work are for a wide range of issues including satisfaction and in part to do with what they get paid. We would make a mistake as a society if we forget how wealth is generated. In the case of RBS we are trying to generate wealth, get the taxpayers' £45 billion back and defusing this delicate time bomb."

Hester admitted he had considered resigning before he turned down his £963,000 share bonus for 2011. But he decided that doing so would have been indulgent, and he should draw on "what strengths of reserves I have" to make RBS a success.