However, the days of the seven-digit bonus appear far from over.

The cost of the financial crisis to British taxpayers has been substantial. In mid-October, the government announced an injection of more than GBP40 billion (HK$457.5 billion) into the country's high street lenders.

Majority stakes were taken in the Royal Bank of Scotland and HBOS and smaller stakes in Barclays and Lloyds TSB.

The thought of bankers reaping substantial rewards in a year during which banks have declined in value or collapsed has been hard for many to swallow.

Weary investors who have been battered by volatile stock markets took comfort in politicians taking aim at wealthy bankers, and the bonus culture in particular, as a hunt for culprits settled on the financial elite.

British Prime Minister Gordon Brown spoke of an unacceptable bonus system and made broad promises of change as he sought to tackle City excesses.

At the heart of his vow is a desire to 'bring an end to rewards for failure', instead refocusing the bonus pool on fair reward, hard work and effort, not 'incentives for irresponsibility or excessive risk-taking for which the rest of us have paid'.

A major problem of the bonus culture is that it promotes huge risk-taking for short-term gain. The Financial Services Authority (FSA) responded with a letter to bank chief executives urging better risk management practices and controls. Further measures are expected from the City watchdog early next year.

The news early this month that the Royal Bank of Scotland would pay millions in bonuses despite being bailed out by taxpayer money has not gone down well with the British public.

More than GBP1.7 billion has been set aside by the lender's investment banking arm for staff costs, which include bonuses. The same division caused a GBP5.9 billion writedown that wiped out the bank's profits.

The government has demanded that boardroom directors at the bailed-out banks not receive bonuses this year. However, below this level banks are set to pay bonuses to those who generate profits.

Lloyds TSB has likewise told staff they will get bonuses this year. Chief executive Eric Daniels said 'there is no reason why we shouldn't'. He cited the 'terrific job' his staff had done this year.

The public response has been one of exasperation.

'To the public, a seven-, let alone eight-figure bonus is obscene,' says Paul Bissell, managing director of executive pay consultancy Strategic Reward Solutions.

'It doesn't matter how you explain it. The average punter on the street cannot get his head around the fact.'

However, the reality is that although boardroom directors may have to relinquish their perks this year, it is often people in less senior roles who are the big earners at these firms.

'It's going to be an individual working in a specialist financial area where the risk to reward is huge,' he notes.

Figures from the Office for National Statistics show that bonuses in the financial sector have shot up in recent years, trebling to about GBP15 billion in the year to April compared with just GBP5 billion in 2003.

The good news for critics is that the financial turmoil is shrinking the bonus pool. A study by the Centre for Economics and Business Research believes this pool will shrink by up to 70 per cent next year compared with the peak payments made in 2006.

'The scale of losses currently being chalked up in the City means that firms will wish to cut back even further on discretionary costs such as bonuses,' the report said.

Finance minister Alistair Darling insists that bonus structures must in future be linked to long-term success. But the Financial Services Authority has been accused of 'going soft' on the issue.

It has launched an investigation into pay structures, with findings to be published early next year. At the most, a code of conduct is expected.

The only likely ace up its sleeve if banks do not comply is to demand additional capital charges from those that do not adhere to its advice. In the meantime, if the government were to clamp down further on bonuses at banks involved in the bailout, market forces would likely result in a drift of talent to banks that have fared well.

'You also need to have a regulatory environment where you can actually make that stuff happen,' says Peter Newhouse, head of pay advisory firm Peter Newhouse & Co.

'You have to have state regulation of pay or more state regulation of the sector.

'As that's not happening, the chance of a uniform outcome is nil.'

Looking ahead, he says the hardest task for regulators is to tackle the discretion banks and other firms enjoy when it comes to awarding bonuses.

'I think people are going to have to get a little bit more scientific about the reason for paying bonuses.'

At the heart of this is the way risk is factored into these payments.

Strategic Reward's Mr Bissell says: 'What the FSA is likely to look at is how much is risk factored into the bonus schemes.

'Do they [companies] inherently encourage risk-taking?'

If anything, what will likely emerge is a preference for bonuses to take into account risks that may occur over time, and for employers to have the ability to defer payment of that element of the bonus to ensure it is more effective.

As Mr Bissell stresses, it is often a handful of highly paid individuals that are able to deliver exceptional profits at a bank.

'For the average person on the street, they don't think about the wealth those individuals create for these companies, they just see a very large number with a pound sign in front of it,' he says.

Executive excess

The amount, in pounds sterling, set aside by Royal Bank of Scotland's investment banking arm for staff costs, which include bonuses, is: GBP1.7b

The same division this year helped wipe out the bank's profits with a writedown of: GBP5.9b