Lord Myners, the City minister, and Alistair Darling, the chancellor, have both spoken out against huge bank bonuses, saying that they will not be tolerated.
Myners' said that the culture of bonuses needed to be reformed, in light of the fact that profits were only being made because of the billions of pounds of taxpayer money sustaining the financial system.
Speaking to an audience of City bankers, he said: "Contemplation of big bonuses in these conditions is nothing short of a market failure."
He urged bank boards to take the lead on restraining their own payouts, saying that he didn't want to "bash bankers", but warned them that if they didn't, "We are willing to take action if necessary".
Alistair Darling also spoke out against the huge bonuses, just a year after the taxpayer bail out. Unusually, he singled out investment bank Goldman Sachs for criticism, saying that the firm just didn't "get" that the public's attitude to bonuses had changed dramatically.
This comes amid forecasts that City bonuses would rise 50 per cent to £6bn this year.
The White House warned yesterday that it was going to order bailed out banks and car firms that have not repaid the government to reduce the cash salaries of their top executives by an average of 90 per cent.
Myners said that the government could not use its stakes in the bailed out banks - RBS and Lloyds Banking Group - to stop bonus payouts.
"If you plan to take a big bonus my advice would be to get ready to explain why your bank's earnings are genuinely attributable to your performance rather than the support of taxpayers across the globe," he said.
