Gloom descended on the City today as thousands of bankers faced disappointment in the wake of the bonus bonanza at Goldman Sachs, where boss Lloyd Blankfein was paid a staggering $70 million (£34.3 million).

Bankers at Dresdner Kleinwort, already reeling from recent sackings in London, are facing up to the prospect of cash limits on their bonuses while counterparts at Goldman enjoy a bumper Christmas.

Fears are growing at Dresdner's offices in the City that those who get a bonus this year will see much of it paid in shares rather than cash. High-flyers will be particularly badly hit by the cash limit, thought to be e500,000(£359,000). Such payments, due to be announced before Christmas, would be a blow to Dresdner staff days after 60 of the bank's credit team were axed - with a further 150 or so to follow.

A spokeswoman said: "Our compensation scheme always includes an equity component, and the size of that this year is still under consideration."

The bonus round started with a bang yesterday when Goldman bankers were told of record payments after another stellar year for the Wall Street giant. Dozens of its London staff were awarded at least £5 million each, with Simon Dingemans, head of European mergers and acquisitions, among the top earners. Chairman and chief executive Blankfein's pay packet is thought to have jumped 30% to $70 million.

Unlike many of its rivals, Goldman has avoided the worst of the global credit crunch, and staff are thought to have shared a total of almost $19 billion - an average of more than $600,000 each. The "Goldmine" bonanza has left the rest of the City looking on with envy.

Staff at Lehman Brothers were today being told of their bonus payments for the year while Morgan Stanley is expected to follow suit tomorrow. Like Goldman, Lehman has reported lower losses than its competitors from the mortgage meltdown and awarded chief executive Richard Fuld $41 million of shares. The total Lehman bonus pot is expected to be about $9.4 billion, or $335,000 per employee - well below Goldman but better than some of its rivals.

UBS staff are preparing themselves for the worst after chairman Marcel Ospel said this week he did not expect and did not want a bonus this year.

• 

  Sex, lies and the Stasi

  On this day in 1989 the Berlin Wall was finally breached, ending the reign of East Germany’s feared security service. Here Anne McElvoy, who spent much of the Eighties in the city, recalls her encounters with the spooks

  ---

• 

  The geeky-girl solo artists descending on the music scene

  Kookiness is what sells music these days and these opinionated artists have it in spades, says Jasmine Gardner

  ---

Why Sam's in the clear over that M&S dress

At last the truth about the M&S spotted dress that Sam Cam wore to the Conservative Party Conference

All stories