PM says there can be no more huge bonus payouts for top executives

Gordon Brown today said that bankers who had acted irresponsibly and taken excessive risks deserved to be "punished".

In an interview with GMTV, the prime minister said that he was "angry at irresponsible behaviour" and that the days of big bonuses in the City were over.

When Brown unveiled his £500bn bank rescue plan yesterday, he refused to accept David Cameron's suggestion that there should be no bonuses at all for executives in banks who are being bailed out by the taxpayer because they have taken excessive risks.

But this morning Brown adopted a tougher stance.

"I am angry at irresponsible behaviour," he told GMTV. "Our economy is built around people who work hard, who show effort, who take responsible decisions, and where there is excessive and irresponsible risk-taking, that has got to be punished."

Brown said the banks who signed up to the rescue plan would have to accept that there could be no more huge bonus payouts for top executives.

"The days of big bonuses are over. One of the conditions of us helping the banks is that we will have to reach an agreement about their executive remuneration," he said.

But asked to clarify the ways in which irresponsible risk-taking would be punished, Brown's spokesman said: "As the prime minister has been saying consistently, what we want to see is responsible risk-taking rewarded."

He said the Financial Services Authority was already putting restrictions in place on bonuses for those organisations in receipt of taxpayers' cash.

But the spokesman appeared to rule out the prospect of any retrospective punishments for those who have acted irresponsibly in the past.

Asked about retrospective punishments, the spokesman said: "The key issue is that we reform the financial system now, going forward."

Yesterday Brown stressed that the banks would receive support from the taxpayer "with strings attached". The exact terms determining how individual banks receive support have yet to be negotiated, but Brown stressed that executive remuneration would be one aspect that would be considered.

However, when journalists asked about this at the Downing Street press conference yesterday, the chancellor, Alistair Darling, said it would be "ridiculous" for the government to determine pay levels.

Darling also suggested that bonuses would be curbed as a result of a review already being conducted by the Financial Services Authority intended to ensure that bankers are not incentivised to take excessive risks.

In his GMTV interview today, Brown attacked the way that the operations of some of the banks had left them dangerously exposed following the collapse of the sub-prime mortgage market in the United States.

"Most of this has come out of America and then affected the British banking system, but there have been abuses in our system as well and these have got to be dealt with too," he said.

"Where these guys have taken irresponsible risks, that is completely unacceptable. The problem is they didn't know what they were buying from America."