Banks are being threatened with a windfall tax on profits amid mounting criticism from across the political spectrum of a return to huge bonuses.

Strong financial results from American investment banks have raised the prospect of a bumper bonus season in Britain, even at the state-controlled RBS.

Evidence that banks were returning to “business as usual” a year after the financial system was bailed out sparked anger yesterday from all the main parties and from President Obama’s Administration. A senior Labour source said that a windfall tax was “plan B” if the banks failed to take action themselves on excessive remuneration.

“The Treasury is determined to take a robust stance on this issue,” the source said. “Exactly what that means is a different issue.

“It is quite difficult, legally, to single out bankers or banks. There is also a question about whether we can hit their balance sheets too hard. Plan A is to get them to take action themselves. [A windfall tax] has been discussed, but it is still very much plan B.”

Lord Myners, the City minister, also criticised the return of banking bonuses. “We are simply not going to accept high levels of remuneration, which are not justified and earned. The nation is angry about this. I’m angry about it,” he told The Andrew Marr Show on BBC One.

The Obama Administration reacted angrily after the investment bank Goldman Sachs disclosed a huge pay rise last week. David Axelrod, a senior adviser to the President, branded the bonuses as offensive yesterday.

Labour imposed a windfall tax on utility companies in 1997. A precedent was set for a windfall tax on banks in 1981 when Geoffrey Howe, the Chancellor at the time, imposed a £400 million tax on commercial banks.

RBS dismissed reports yesterday suggesting that it was preparing to pay its bankers bonuses of up to £5 million each, from a total pool of £4 billion. A source close to the bank said that no decisions had been made.

Analysts say, however, that the investment banking arms of Barclays and RBS, which is 70 per cent government-owned, are on course to pay bigger bonuses than last year. Both give updates on their performances next month.

Goldman Sachs has disclosed that its pay and bonus pot amounts to $16.7 billion (£10.2 billion) for the first nine months of this year, up 46 per cent on last year.

Angela Knight, chief executive of the British Bankers’ Association, said that banks’ profits determined the dividends for shareholders. She added: “If the Government is going to [impose a windfall tax], they will have to be very mindful of the consequences. Many millions of people’s pensions depend on the UK banking industry paying dividends on their shares.”

The G20 group of countries struck an international agreement last month that stopped short of a formal cap on bonuses, but recommended that up-front cash bonuses should be scrapped and that bonuses could be “clawed back” if investments made losses in the long term.

The Financial Services Authority will bring the banks’ behaviour under scrutiny again today when it publicises plans for tougher regulation of the mortgage market. As reported in The Times last week, the regulator wants to ban self-certified loans and will demand tighter checks on borrowers’ ability to repay loans.

Where bonuses go

Property

Luxury cars

Swiss watches

Savile Row suits

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