The war of words over former Royal Bank of Scotland boss Sir Fred Goodwin's controversial pension has flared up again as a taxpayer-backed body prepared to lodge a formal protest vote over the £703,000 deal.
City minister Lord Myners came under renewed pressure after ex-RBS chairman Sir Tom McKillop said there was "no elaborate ruse" by him or other board members to pay Sir Fred more than he was contractually entitled to.
In a letter to the Treasury Select Committee, Sir Tom said evidence from Lord Myners needed "clarification" and insisted the minister was told last October that Sir Fred's pension pot would be increased as a result of early retirement.
During a committee hearing earlier this month, Lord Myners told MPs he did not ask Sir Tom and RBS independent director Robert Scott the exact size of Sir Fred's pension during a meeting on October 11.
But Sir Tom said the minister was told in a private meeting that day the pension would be "the sensitive issue and that it would be 'enormous'".
In a Commons debate on the economy, Tories repeatedly suggested Lord Myners should resign. Shadow chancellor George Osborne said: "While the Prime Minister was pretending to be angry about the Goodwin pension his hand-picked minister knew about it all along."
But Chancellor Alistair Darling denied Lord Myner's position was "unsustainable", while the Treasury said Sir Tom's letter confirmed the position Lord Myners had already set out.
A Treasury spokesman added that the RBS board was conducting a "serious and urgent" legal investigation.
Meanwhile the public body which owns a majority stake in RBS said it would register a protest vote against Sir Fred's pension at the bank's annual meeting on Friday. UK Financial Investments (UKFI) will reject the remuneration report of the bank because the board decided to grant Sir Fred and another director, Johnny Cameron, full pensions despite retiring early.
UKFI chief executive John Kingman said: "UKFI is not satisfied that it was in the company's interest - and therefore UKFI's as a value-oriented shareholder. UKFI therefore cannot vote in favour of it."
