RBS boss says political meddling is 'damaging' the bank

Royal Bank of Scotland offices in London

RBS shareholders are meeting in Edinburgh

The chief executive of RBS, Stephen Hester, says political meddling is damaging the bank.

"The process of politicisation of RBS is damaging... to our business and to taxpayers' interests" he said, pointing to the fall in the bank's share price.

He was speaking after a meeting in which shareholders backed plans to enter a government insurance scheme.

The asset protection scheme means the Treasury acts as an insurer against the bank's £282bn of bad debts.

Under the terms of the support deal, the UK taxpayers' stake in RBS rises from 70% to 84% after the government invests an extra £25.5bn in the bank.

"Without these measures RBS would be at risk of full nationalisation," chairman Sir Philip Hampton had said earlier.

He told the meeting: "In that event independent shareholders could very well lose most or all of the value in their shares" .

Shareholders voted 99% in favour of the proposal.

Sir Hampton also denied that his board threatened to resign over the bonus row.

"There have been no threatened mass resignations of the board, at any time" he told a shareholder meeting.

He was referring to BBC reports earlier this month that the board had been advised that they would have to resign if the government vetoed planned payouts for its top earners.

Business editor Robert Peston reported that the RBS board believed they would have to act in the interests of shareholders and ensure the bank's pay was competitive enough to attract the best staff.