Taxpayer bailout to help stricken UK banks

That cheque was divided between the Royal Bank of Scotland, Lloyds TSB and HBoS (if they complete their merger), making the UK government a shareholder in some of the sector’s largest players.

In return for playing white knight, board members at beneficiary banks will forego cash bonuses in 2008 and see their compensation packages undergo a review that could spell death for the money-for-nothing era of executive pay.

Keen to play down emergence as a major banking sector shareholder, the UK Treasury said: “Because the agreements the government has made with banks will be priced on commercial terms, taxpayers will be rewarded for providing this support to the banking system.”