David Cameron continues campaign to curb bankers’ bonuses

Prime Minister David Cameron today said he is still talking to banks about their bonuses and that big payouts at taxpayer-owned lenders would be "limited".

Asked about reports of a £2.5 million pound bonus for Royal Bank of Scotland chief executive Stephen Hester, Cameron said: "It isn't a done deal ... You will have to wait and see."

The Government is urging a curb on bonus payments to quell public anger about harsh spending cuts imposed after the bailout of banks contributed to a record peacetime budget deficit.

"We are having detailed discussions with Barclays and with the other major clearing banks to try and get a settlement of this whole issue," Cameron said.

"Let me tell you what I want. I want the bonus pools to be lower, I want the taxes that the banks pay to be higher and, vitally, I want the lending that they do to business — particularly small business in our economy — to increase."

He made a distinction on bonuses between those banks the Government has a stake in, like Lloyds Banking Group and RBS, and others such as Barclays which it could do little to influence.

"In a matter of weeks... you will be able to see both what is going to happen at, effectively, state-owned banks, where I absolutely believe they should not be the front-markers on bonus payments; they will be the backmarkers," he said.