The Westminster Government has warned excessive bonuses will not be tolerated at the Royal Bank of Scotland.

The Coalition's move followed reports John Hourican, pictured, head of the bank's investment arm, is in line to get £4 million in April.

The timing is controversial as RBS has announced plans to sell off much of its investment banking sector, potentially leaving thousands of staff redundant.

A Downing Street spokesman said last night ministers would "make sure pay reflects and rewards performance" in RBS, which is still more than 80% owned by the taxpayer. But he also said no decisions had been made on bonuses and that any mooted figures were "speculation".

It is the latest in a series of Government attempts to crackdown on huge bonuses in the sector.

Prime Minister David Cameron wants to increase the power of shareholders to veto high wages and rewards.

Last month the Treasury announced plans to publish the bonus pots of the 100 top-earning bankers in the country.

Simon Danczuk, Labour MP for Rochdale, said: "If the Prime Minister is serious about empowering shareholders he should lead by example and take action to ensure unfair pay awards are not allowed."

The Confederation of British Industry has attacked the proposals to allow shareholders to vote on executive pay packages.

Director John Cridland said: "Binding shareholder votes would simply be shutting the stable door after the horse has bolted. Shareholders would only be voting after the problem has happened."