DAVID Cameron last night piled pressure on Royal Bank of Scotland chiefs, signalling that he wanted the annual bonus of chief executive Stephen Hester to be halved to below £1 million.

The Prime Minister's call came as he set out his vision of a "socially responsible and genuinely popular capitalism".

Last year, Mr Hester was awarded a bonus of £2 million in deferred shares, which he is not due to cash in until 2014.

It was suggested RBS chiefs were about to enrage politicians and the public alike by offering him a bonus of up to £1.5 million for 2011 on top of his £1.2m salary.

However, Sir Philip Hampton, the bank's chairman, made clear neither its remuneration committee nor its board had met to discuss the issue of Mr Hester's bonus. "Any suggestion to the contrary is therefore untrue," declared Sir Philip.

He added: "The board will act in accordance with its usual governance timetable and consider executive remuneration following conclusion of the shareholder consultation."

Following his speech on "moral markets", Mr Cameron was asked if he would prevent the bosses of poorly performing state-owned banks – RBS shares have fallen by nearly half in the last year – receiving £1m bonuses. He replied: "The short answer to that is yes."

While he too made clear no decisions had been taken on bonus payments at the 82% state-owned bank, he stressed Mr Hester would get significantly less than the £2m he received last year.

"I can tell you something," the PM said, "if there is a bonus, it will be a lot less than it was last year."

Mr Cameron also insisted that cash bonuses at RBS would once again be limited to just £2000.

However, an RBS spokesman said the UK Government, while the major shareholder, had no direct power to veto any bonus the bank's board approved for Mr Hester; the only power it had was political pressure.

He explained that UK Financial Investments, the company set up by the Coalition to manage the taxpayers' shareholdings in banks, could only "consult" with RBS's remuneration committee about its views on bonuses.

"It's done in the spirit of consultation and before any decision is made, we understand what the expectations of us are and what the direction of travel is."

He added: "If we come up with something shareholders don't like, we would run the risk of a bad vote at the AGM."

One banker noted how the RBS board was unequivocal in believing Chancellor George Osborne did not set the bonus of Mr Hester, who was being urged to accept a £1m-plus bonus.

If he did not, he added that it would send a signal to staff they now worked "for an arm of the civil service or a utility rather than for a bank".

The bank's remuneration committee, which will decide on Mr Hester's annual bonus, will meet in the coming weeks. The chief executive's payout will certainly be known before February 23, when RBS's yearly results are published.

In his speech in London, Mr Cameron locked horns with Ed Miliband, the Labour leader, in attacking so-called crony capitalism.

He told an audience of business leaders: "I want these difficult economic times to achieve more than just paying down the deficit and encouraging growth. I want them to lead to a socially responsible and genuinely popular capitalism; one in which the power of the market and the obligations of responsibility come together; one in which we improve the market by making it fair as well as free, and in which many more people get a stake in the economy and share in the rewards of success."

His speech followed calls from Mr Miliband for "responsible capitalism", which would treat "predatory" businesses differently from those making long-term investments in the economy.

Earlier yesterday, the Labour leader said he did not believe the PM was "serious about this agenda" and challenged him to act on rip-off bank charges, exorbitant train fare increases and the "rigged" energy market.