The bank is quite eightieth owned by the taxpayer, and Johnson, the Conservative mayor of London, reacted to the payout by saying the govt. "should step in and kind it out".
The bonus, that has been described as "utterly unacceptable" by a Liberal Democrat peer, can internet the RBS chief, Stephen Hester – who earns a basic salary of £1.2m – an extra three.6m bank shares that may be cashed in in 2014. At current costs, the shares are value £963,000.
Miliband, the Labour leader, said David Cameron had didn't live up to his rhetoric on government pay and shareholder activism.
"It's a disgraceful failure of leadership by the prime minister," he said. "He's been promising, for months, action against excessive bonuses, government pay, and currently he is nodded through a million-pound bonus.
"He's conjointly been lecturing shareholders regarding how they have to be additional active in holding executives to account.
"He owns, through the British government, eighty three of the Royal Bank of Scotland. He should currently make a case for, not least to the British folks, why he has allowed this to happen."
Hester's payout was understood to be restricted to around hr of the utmost following intense political pressure at the bank, that had to be bailed out with £45bn of public funds throughout the credit crunch.
Speaking from the globe Economic Forum in Davos, Switzerland, Johnson described the bonus as "absolutely bewildering" and said it ought to are blocked by ministers.
He said RBS ought to be run "on public sector lines". In an interview with the BBC, he added: "The concept that this is often not within the management of the govt. appears to me to be far-fetched. Stephen Hester is an ready man, most likely doing a tough job, and his contract should are required, I guess, when he was appointed in 2008 beneath Alistair Darling and Gordon Brown.
"I don't grasp what they were thinking of after they drew it up that approach, however it actually appears to me to be right that the govt. ought to step in and kind it out. folks won't perceive how someone will get a whacking nice bonus like that after they are essentially running a state-owned concern, and that i am at a loss to justify it."
But the deputy prime minister, Nick Clegg, said it absolutely was up to Hester to form the choice regarding whether or not he would take the bonus. Clegg place the blame for the government's inability to prevent the payout on the previous Labour administration.
He said: "The chancellor and also the Treasury have explained the frustrating realities regarding all of this – that is that if we tend to ripped up the contracts that the Labour government had signed with them, or modified the arrangements of those arms-length taxpayers bodies that manage our stake within the banks, we tend to most likely, as taxpayers, would have ended up paying even more cash."
On Thursday night, the Liberal Democrat Foreign workplace minister, Jeremy Browne, appealed on BBC1's Question Time to Hester to show down the bonus, equating 3 days of the bank chief's pay with a year's salary for a soldier "risking his life" in Afghanistan.
"He is functioning for a corporation that is five-sixths owned by us, the taxpayer, and that i suppose he needs to suppose sort of a public servant, not like somebody who's there to line their own pocket," Browne said.
"He must suppose sort of a public servant who incorporates a duty to his country, not simply his own wealth. No one's forcing him to require this cash. He might struggle on with £1.2m."
But the Conservative Mark Field, the MP for town of London and Westminster, told BBC News twenty four it absolutely was "easy to kick" Hester and accused Johnson of electioneering.
He accused Miliband and Browne of "grandstanding hypocrisy" and using the "ethics of the schoolground bully".
No ten has said its hands were tied on the bonus owing to previous contractual arrangements required beneath the Labour government.
However, this argument perceived to be undermined by the intervention of Lord Myners, the previous money services minister, who negotiated the RBS deal.
Earlier on Friday, he said: "There is nothing within the employment contract of Stephen Hester or any director of Royal Bank of Scotland that binds the corporate or its remuneration committee to pay a compulsory bonus.
"All matters concerning bonuses are at the complete discretion of the board of administrators and also the shareholders, as well as UKFI, who have elected them."
The shadow business secretary, Chuka Ummuna, conjointly hit back at accusations from the govt. that Hester's bonus arrangements were mounted.
"The deputy prime minister, prime minister and others have tried to counsel that the bonus framework was set by the last Labour government, that is just untrue," he said.
"RBS has been terribly clear that the remuneration committee of the board of the bank had discretion during this case."
The TUC general secretary, Brendan Barber, described Hester as Britain's best-paid civil servant at a time of austerity within the public sector. "Ordinary folks facing the largest squeeze in their living standards for many years and businesses desperate for credit won't perceive why Mr Hester ought to get such an enormous bonus," he said.
"The government has been lecturing public servants regarding how they need to settle for a pay freeze and an enormous increase in pension contributions. they appear to possess created an exception for Britain's best-paid civil servant."
Since Hester joined RBS in November 2008, it's cut thirty three,000 jobs. Shares in RBS are trading at around 0.5 the worth of their 2010 high.
The announcement of the bonus came once Cameron gave a speech condemning a money transaction tax on town as "madness".
"Even to be considering this at a time after we are struggling to induce our economies growing is sort of merely madness," he told leaders during a speech to the globe Economic Forum.
Lord Oakeshott, the Liberal Democrat peer who resigned as a Treasury spokesman a year ago over what he gave the impression to be the money sector's lax treatment by the govt., said the bank ought to realise that any bonus for Hester this year was "utterly unacceptable".
Sir Philip Hampton, the RBS chairman, said on Thursday: "[Hester's] pay is strongly geared to the recovery of RBS, that he was recruited to show around, having played no half in its collapse. The priority is to reshape a business that was way too huge and much too risky, reducing legacy losses while improving performance within the group's sturdy core businesses."
Hester isn't the sole member of the bank to receive an outsized remuneration package. John Hourican, the pinnacle of the RBS investment arm, who can oversee a restructuring which will embody around three,500 job losses, can receive up to £4m in long-term incentive shares that he was awarded in 2009.
Britain's biggest banks are expected to unveil their bonus plans after they publish their annual results next month.
