No cash bonuses to be paid to Lloyds and RBS staff earning more than 39,000

According to The Telegraph, the move comes because more taxpayers' money is to be injected into funding the banks' recovery.

Lloyds will receive a further £5.7 billion from the Government; and RBS will collect up to £25.5 billion more from the Government in a move that sees the taxpayers' stake in the bank climb from 70% to 82%.

But the news comes amid reports RBS is to shed a further 3,700 jobs.

The union, Unite, says ministers and employers have a duty to prioritise saving jobs over securing the best price for the banks' assets.

Unite national officer Rob MacGregor said: "Another day, another announcement bringing huge uncertainty to employees at the part-nationalised banks, RBS and the Lloyds Banking Group. We cannot allow a situation to arise where workers in bank branches in high streets and towns across the country are made to pay the price for the banking executives' recklessness.

"While this is a decision largely out of both banks' hands in divesting these assets, simply securing the best price would be letting down loyal and long-serving staff. Any potential buyers should be assessed on the commitment to job security and protection of terms and conditions, not short-term profit maximisation.

"The employers, UK Financial Investments and the Government all have a duty to these long-suffering staff to ensure that opportunistic buyers are not permitted to asset-strip these institutions, leaving thousands of them facing a bleak future. For Lloyds-owned Cheltenham & Gloucester staff this is a further blow and a return to massive uncertainty as the on/off decision on their future continues.

"The Government has saved the banks, now it is time to save bank workers."