Bankers: Bosses may slash 2010 bonus pot by £3 billion

Reports that major British banks have been holding talks to discuss reducing the staff bonus pot refuelled the debate on City handouts among ministers and business leaders.

It is estimated banks will pay out a total of 7 billion in bonuses this year, but they could be pressured to cut this by nearly half to 4bn.

Business Secretary Vince Cable said it was reasonable for the public to want bankers to show "restraint" with their bonuses. He said: "In these challenging times, millions of workers across the public and private sectors are working out how to do more for less and often undergoing pay freezes.

"Banks have been significant recipients of public generosity in the past few years. In return, it is quite reasonable to have high expectations of the way they conduct business and that they are encouraged to show restraint in how they reward themselves during this difficult time."

John Cridland, the new CBI director general, said bankers should be able to show they have earned their windfalls. He said: "The important part about executive remuneration and bonuses is that shareholders and other stakeholders can see that it is earned."