Action pledge over bankers' bonuses

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Speaking on BBC 1's Andrew Marr Show, City minister Lord Myners said the Government could prevent "unjustifiable" payouts.

The Financial Services Secretary stressed that the Government had the powers to approve the framework within which pay and bonus decisions are made and would take action if necessary.

His comments come amid a swathe of reports suggesting major banks are lining up hefty bonuses for staff, including part-nationalised Royal Bank of Scotland - one of the biggest recipients of taxpayer bailout cash.

Lord Myners said: "We are simply not going to tolerate high levels of remuneration which are not justified and earned. The nation is angry and I'm angry."

He added: "We have made it very clear... that bonuses must be justified and that boards of directors must challenge the decisions and if we found that the bonuses policy was an unreasonable source of risk or simply not justified, we would vote against it."

RBS, which is more than 70% owned by the taxpayer, last night moved to deny reports that top investment banking staff are on course for up to £5 million each in bonuses this year.

RBS has already put aside £1.79 billion in the first half of 2009 to cover staff expenses, including salaries and bonuses.

A spokesman said no decisions had been made on the full year payout and that any estimations were "without any foundation whatsoever". But last week's bumper start to the US third quarter bank reporting season from JP Morgan and Goldman Sachs fuelled concerns it was "business as usual" less than a year after the financial crisis that tipped the world into recession.

Goldman Sachs revealed it had earmarked 16.7 billion US dollars (£10.3 billion) for the first nine months of 2009 to cover compensation and benefits for its 31,700 staff globally - totalling an average 527,000 US dollars (£325,000) for each employee. The 46% leap in payouts came after it reported third-quarter net earnings soaring to 3.19 billion dollars (£1.96 billion) from 845 million dollars (£519.8 million) a year ago.