Disgraced former Royal Bank of Scotland boss Sir Fred Goodwin is to hand back some of his controversial £703,000-a-year pension..
Sir Fred is understood to be preparing to hand back up to £200,000 a year, which would cut the value of his pension pot by around £4 million.
The ex-RBS chief executive caused public outcry when he refused to make any change to his pension, despite playing a part in the near-collapse of the banking giant.
Sir Fred is believed to be offering the concession under pressure of legal action from RBS, which is now more than 70% owned by the taxpayer.
But it is unclear if his offer will be accepted by the Government, as reports suggest the Government is concerned the £200,000 reduction is not enough.
It is thought there may be Government reluctance to accept a reduction that would still leave Sir Fred with more than he would have received if he had been dismissed rather than leaving on agreed terms. The Treasury declined to comment, as did RBS and Sir Fred's spokesman.
The move would mark a major climbdown for Sir Fred, who denied as early as April that he was considering any voluntary reduction in his pension.
He has previously maintained he had a contractual right to the pension and that he expected the bank to fulfil its obligations.
Sir Fred has rejected Government and public pressure to accept a reduction in his package, insisting in a letter to City Minister Lord Myners in February that changes to the early retirement deal he negotiated when he was forced out in the autumn were "not warranted".
However, the bank and the Treasury have been taking legal advice on whether they can claw back some of the payment.