Darling warning on fat cat bonuses

He has warned City executives that people are getting "fed up" with the multi-million pound payouts.

In a climate of growing economic uncertainty, Mr Darling said executives should ask themselves whether they could justify their bonuses when talking to their next-door neighbours.

The Chancellor appeared to echo claims that business leaders were being rewarded for failure by suggesting that some people believe that they do little to deserve their bonuses.

His comments came after more than £7 billion was handed out at the end of last year in what was one of the most generous bonus seasons ever seen, despite widespread expectation of economic turmoil.

Mr Darling told the Daily Telegraph: "People get fed up if they see others getting great big bonuses and they can't actually see what they did. It can be extremely frustrating.

"Boards need to ask themselves, 'Are we behaving reasonably?'... If you're leaning over the fence talking to your next-door neighbour, can you justify what you've done?"

Mr Darling's comments follow a set of concessions on proposed changes to capital gains tax and taxation of non-domiciled workers in response to business protests. They suggest that he is relying on self-restraint in the boardroom to see off growing public unease about the widening gap between the super-rich and others who are having to tighten their belts.

"There's absolutely nothing wrong with giving somebody a reward, but at the present time when people are going through these difficulties, that's something that boards have got to look at," Mr Darling told the Telegraph.

"They should behave responsibly. You have to ask - can you justify this? Can you say hand on heart this is the right thing to do? If you can't justify it to your next-door neighbour you should think again."