Treasury minister urged to quit in row over RBS chief pension

Lord Myners, the Treasury minister, was under increasing pressure last night over his failure to halt the £693,000-a-year pension given to Sir Fred Goodwin, the former chief executive of Royal Bank of Scotland.

There were calls for him to resign after Downing Street refused to say if he had asked RBS whether Sir Fred's huge pension was discretionary when it was approved. Gordon Brown is standing by the minister, a long-standing ally he brought into his Government just 10 days before RBS was rescued with a £37bn bailout.

The Tories described the position of Lord Myners as "increasingly untenable". Michael Fallon, the senior Tory on the Commons Treasury Select Committee, said: "It was his job to protect the taxpayers' interest and he failed to do that, I think he should resign."

John McFall, the committee's Labour chairman, said: "This is a point Lord Myners has to clarify." Paul Kenny, the leader of the GMB union, said: "If Lord Myners agreed, or even worse if he did not check what sort of pension he was going to get, he should go."

But an ally of Lord Myners insisted the Treasury had not approved the pension. Government sources suggested Lord Myners was misled by the RBS board into thinking the pension deal was contractual.

It is believed that the main focus of Lord Myners at the time was in ensuring that RBS survived, and that Sir Fred departed without a headline-grabbing cash payoff.

Mr Brown said RBS's behaviour "is something that makes me angry and will make the public angry". He added: "That is why we are taking all the legal advice necessary to secure the rights of the general public in this and are still asking Sir Fred to waive the pension."

John Prescott, the former deputy prime minister, urged the Government to halt the pension payments. "I believe, basically, take it off him and let him sue in the courts," he said.

Lord Mandelson, the Business Secretary, told ITV News: "I've seen some blame-shifting and buck-shifting in my time. This pension begins and ends with Sir Fred Goodwin."

Sir Fred was accused of misleading MPs. He told the Treasury Committee this month his pension was "determined the same way as anyone else's".