Bob Diamond, the banking chief who told MPs last month that it was time bankers stopped apologising for their role in the financial slump, is in line for a bonus of up to £9.5m.
The Barclays chief executive has an annual salary of £1.35m but the bank's renumeration board met yesterday and are reported to have decided he should get a bonus of between £8m and £9.5m.
The scale of the award, which goes before the bank's board for approval next week, is a slap in the face for the Government, which had hoped to persuade the financial sector to keep bonus levels down.
Ministers face further embarrassment because Project Merlin, the scheme under which banks were supposed to commit to increasing lending to small businesses while reducing bonus levels, has stalled without agreement.
The award, if ratified and accepted by Mr Diamond, is expected to inflame public anger at the size of bonuses offered to senior executives at a time when many workers, especially in the public sector, are about to be made redundant because of the economic climate and the Government's austerity measures.
Public acceptance is likely to be further tested because while Mr Diamond is poised to get a bonus that could be worth 38 times the average price of a house, many families are having to reduce their household budgets because of rising inflation and a 2.5 per cent increase in VAT.
Mr Diamond, who is estimated to have a personal fortune of £95m and was once described by Lord Mandelson as "the unacceptable face of banking", went before the MPs on the Treasury Select Committee last month.
He claimed during the hearing that the issue was bonuses was not "taken lightly" and said: "We are sensitive; we're listening," and "there was a period of remorse and apology for banks and I think that period needs to be over". During the hearing he refused to reveal if he would take his 2010 bonus.
The bonus package he is due to receive is understood to be for his work at Bar Cap in 2010, which put in a strong performance last year.
Under new rules from the Financial Services Authority, Mr Diamond will only be able to receive 20 per cent of his bonus upfront in cash. The rest will be paid in shares or bonds.
He took over as chief executive in January this year, getting a £250,000 increase in his salary, and in the last five years he has been given £75m for his work at the bank. In 2006 he earned £23m and once said that he preferred the phrase "incentive compensation" to the word "bonus".
A spokeswoman for Barclays stressed last night that no final decision has been taken on Mr Diamond's bonus. The bank is expected to announce later this month the proportion of its revenue paid out to staff has risen from 38 per cent to between 40 and 45 per cent.
Len McCluskey, general secretary of Unite, said the bonus meant banking bosses "continue to ignore the devastation their banks have brought to this country and the Government continues to allow them to laugh all the way to the bank".
Chuka Umunna, Labour MP for Streatham and a member of the Treasury Select Committee, told the Financial Times: "At a time when many public-sector workers are receiving their redundancy notices because of austerity measures taken as a result of the debts caused by the financial crisis, any award of this size will arouse anger among those now paying the price." The size of Mr Diamond's award is likely to be one of the biggest of the year, being ahead of the £7.8m awarded to Lloyd Blankfein, the chief executive of Goldman Sachs, and about £4m in restricted stock and options awarded to James Gorman, the chief executive of Morgan Stanley.
Bonus season in numbers
£7bn expected to be paid in City bonuses this year
£24m Value of Bob Diamond's sale of shares in Barclays Global in 2009
£28,207 The average salary in the UK in 2010Reuse content