Goodwin's knighthood on the agenda

Former RBS chief Sir Fred Goodwin (Getty Images)

Senior civil servants will meet this week to decide whether ex-Royal Bank of Scotland boss Sir Fred Goodwin should be stripped of his knighthood, David Cameron said today.

The work of the Honours Forfeiture Committee is usually kept under wraps but the Prime Minister told MPs he expected it to sit in the coming days.

Political pressure has been mounting for the title awarded to Sir Fred in 2004 for "services to banking" to be withdrawn over his role in the subsequent collapse of RBS.

Asked when a decision would be made, Mr Cameron said: "The Forfeiture Committee will be meeting, as I understand it, this week.

"And it will be considering all of the evidence including, as I have said before, the Financial Services Authority report into RBS and what went wrong and who was responsible."

All three main party leaders have backed a rethink, with Mr Cameron and Deputy Prime Minister Nick Clegg sympathetic to demands that the honour to be removed.

Labour leader Ed Miliband has explicitly called for the senior City figure to lose his "Sir" and admitted that his party was "clearly wrong" to recommend it in the first place.

But so far only six MPs have put their names to a Commons motion, tabled by Tory MP Matthew Hancock, which says it would be "perverse and unacceptable" for him to retain the knighthood.

The committee, chaired by the head of the home Civil Service Sir Bob Kerslake, normally acts only when recipients of honours are jailed or struck off by professional bodies.

Mr Cameron has repeatedly suggested that the FSA's criticisms of Sir Fred's role at RBS, which had to be bailed out with £45 billion of taxpayers' money, could justify the move however.

It emerged this week that a direct criticism of the then chief executive in the final draft of the FSA report was removed at the request of his lawyers.

A reference to him having insufficient experience to run an international bank was excised from the text after complaints that it amounted to a charge of incompetence for which there was no evidence.

One of the experts who reviewed the report told MPs that it contained nothing which would expose Sir Fred to legal charges in relation to the fateful 2007 decision to buy ABN Amro, which eventually forced RBS to seek a state bailout.

But Sir David Walker told the Treasury Committee that the FSA's findings amounted to "censure".

"There is an accumulation of poor decisions which were, as the report says, poor by the standards of the time, and it is very hard to see how this can't be, in your sense, a censure of the chief executive, who was pivotal in virtually every decision that was taken," he said.

The Forfeiture Committee has previously discussed whether or not Sir Fred should lose his title - in 2009, when a Labour MP led the campaign for action.

It is thought unlikely that the Forfeiture Committee will make any decision on Sir Fred's case at this week's meeting, but a recommendation is expected within weeks rather than months.

Reconsideration of honours is normally triggered by a referral from the authority which initially nominated the individual concerned, which in Sir Fred's case was the Scottish Executive.

The committee does not call witnesses to give oral evidence, but has the discretion to look at whatever documentary evidence it chooses. There is no requirement to give Sir Fred an opportunity to defend himself.

If it recommends removal of the knighthood, its decision will be passed on to the Prime Minister to be communicated to the Queen. Mr Cameron does not have the option of rejecting the recommendation, and while the Queen could theoretically do so, in practice she invariably follows the committee's advice.

A notice of withdrawal of the honour would then be published in the London Gazette.

The Cabinet Office declined to reveal when this week the committee will meet.

AP