Downing Street 'won't block other RBS bonuses'

RBS is 82% owned by the British taxpayer

The government has said it will not block bonuses to other RBS executives, after chief executive Stephen Hester decided to waive his award of £963,000 in shares.

A Downing St spokeswoman told the BBC: "We are not going to micro-manage bonuses."

"They are doing a good job and making good progress," she said.

She added it was absolutely essential that the RBS executive team was left in place to sort out its problems.

On Sunday, Mr Hester waived the 3.6 million shares package - his performance bonus for 2010 - after Labour MPs planned to force a Commons vote on the issue.

It came the day after it emerged RBS chairman RBS Philip Hampton had waived a shares-only bonus worth £1.4 million.

The spokeswoman added: "The prime minister's view was that he wanted the bonuses to be lower.

"He always made it clear that it was a matter for Mr Hester whether he took that bonus or not, and that should remain the case.

"Reward for good performance is not in itself a bad thing."

David Fleming, Unite union national officer said: "Better late than never will be the feeling amongst the call centre, bank branch and processing staff at RBS, that Stephen Hester has finally bowed to public pressure to waive his nearly £1million bonus.

"This gesture goes some way in acknowledging the hypocrisy of an organisation, which has sacked over 21,000 staff, while still attempting to pay bumper bonuses to the bosses."

Lord Oakeshott, the former Liberal Democrat treasury spokesman said: "I'm all in favour of Mr Hester or anyone else earning plenty of money from RBS - if he runs the bank to do what really matters and if he won't lend to small business, as he promised, he shouldn't get any bonus."

The overall bonus pool at RBS's investment banking arm, which will be revealed days before the results on February 23, is expected to be half the £950 million of the previous year.

Barclays, which unlike RBS received no direct state help during the credit crunch, is reported to be considering paying its chief executive Bob Diamond up to £10 million in the forthcoming bonus season, compared with a total payout of £6.5 million in the previous year.

However, no formal announcement has been made.