Former Royal Bank of Scotland chief Sir Fred "the Shred" Goodwin is facing increasing public and government pressure to give up his pension after running the bank into the ground.
RBS, which has its head office in St. Andrew Square, reported an annual loss of more than £24bn on Thursday - the largest corporate loss in British history.
The British taxpayer is now the majority owner of the bank.
"The Royal", not long ago, was the fifth largest bank in the world. However, its quick expansion, under Sir Fred, proved to be its downfall. The bank took too many risks, paid too much for its acquisitions and became mired in "toxic" debt.
The taxpayer is exposed to £254.25bn of RBS's bad assets after the government stepped in last week with a second bailout for the bank in the shape of the Treasury's Asset Protection Scheme (TAPS).
Goodwin left the bank after the initial bailout in October last year with a pension worth £693,00 per year which he can now start drawing at age 50. Responding to growing public and government pressure to voluntarily reduce his pension Goodwin wrote on Thursday to City Minister Lord Myners:
"I accept responsibility for that which I was responsible for, and recognise that my actions must be consistent with this. I believe that they have been and to voluntarily accept a reduction in a pension entitlement which has been built up over many years and in other employments in addition to RBS, is not warranted."
Lord Myners responded the same day with a letter saying that he found Sir Fred's decision not to voluntarily reduce his pension "unfortunate and unacceptable."
"I do not agree with your rationale for declining my request that you voluntarily reduce your pension. And indeed I hope that on reflection you will now share my clear view that the losses reported today by the bank which you ran until October cannot justify such a huge reward."
The government is now looking at ways in which it can legally clawback Goodwin's pension.