The former Royal Bank of Scotland chief executive was described as being deeply upset about how former allies have shunned him since the institution was brought to the edge of ruin.
Sir Jackie Stewart, the triple Formula One world champion and a friend of Mr Goodwin’s, reportedly said the ex-bank boss felt “abandoned” and was being made a scapegoat.
He said: “He’s a real Scot. When Fred Goodwin goes on holiday, he goes to St Andrews. But he may be driven out of Scotland by the manner in which he’s been dealt. The rest of the world has not been as derogatory as the British media and British public have been.
“He is very fond of his children and it is very tough on them and on his wife, Joyce. I know that their marriage has been severely damaged by it all. I think he has certainly suffered in silence. He could have written a book, he could have spoken to the media but, out of courtesy to the bank and his previous employers, he has kept himself to himself.
“People have been allowed to throw snowballs, but none has been thrown back.”
The Queen ratified the annulment of Mr Goodwin’s knighthood on 31 January and accepted his resignation from the Queen’s Silver Jubilee Trust.
Prime Minister David Cameron, Labour leader Ed Miliband and First Minister Alex Salmond all welcomed the decision to strip him of his title. Former chancellor Alistair Darling and the Institute of Directors both hit out at the decision.
Concerns were also raised that it could make Britain look “anti-business”.
Sir Jackie said former prime minister Gordon Brown was among those who turned their backs on the powerful bank chief after the disastrous acquisition of ABN Amro and a £45.5 billion taxpayer bailout.
He said: “Fred is a strong character and he hides his emotions extremely well, but there is no doubt that he is more than disappointed that more people have not recognised he couldn’t have done that alone.
“Gordon Brown was behind this deal and afterwards he turned his back and didn’t give any support at all.”
Sir Jackie, who used to be a paid brand ambassador for RBS, added: “Fred has done nothing criminal and yet his life has been, to a very great extent, destroyed.”
In a statement, after the Honours Forfeiture Committee recommended Mr Goodwin be stripped of his knighthood, the Cabinet Office said the failure of RBS was key in triggering the worst recession since the Second World War.
A spokesman said: “The scale and severity of the impact of his actions as CEO of RBS made this an exceptional case.
“Both the Financial Services Authority and the Treasury select committee have investigated the reasons for this failure and its consequences.
“Fred Goodwin was the dominant decision-maker at RBS at the time. In reaching this decision, it was recognised that widespread concern about Fred Goodwin’s decisions meant that the retention of a knighthood for ‘services to banking’ could not be sustained.”
Mr Goodwin was awarded his knighthood in the 2004 Queen’s Birthday Honours List.