Deputy Prime Minister Nick Clegg is set to warn banks that there will be no let-up in the government's tough stance on bonuses in a speech on Monday.
Public anger about the size of bonuses paid in Britain's powerful financial sector has remained high in the wake of the credit crisis, which saw taxpayers' money used to bail out and rescue several leading British banks.
According to the text of Clegg's speech, the British government is resolved to renew efforts to clamp down on excessive bonus payments to top executives of bailed-out banks such as Lloyds and Royal Bank of Scotland.
On the eve of bonus season, let no one be in doubt about our determination to use our clout as the major shareholder in these banks to block any irresponsible payments, or any rewards for failure, Clegg will tell the think-tank Demos.
The coalition government, which struck a deal with British banks earlier this year to rein in pay and increase their lending to companies, stepped up its pressure on remuneration in the banking sector this month when it proposed greater disclosure on pay from next year.
Analysts expect British banking bonuses to fall by nearly 40 percent this year, reflecting a slump in revenues as the euro zone sovereign debt crisis weighs on stock and bond markets.
As a result of the bailout of troubled banks, which cost British taxpayers 66 billion pounds ($102.5 billion), the state owns 83 percent of RBS and 40 percent of Lloyds.
(Reporting by Alessandra Prentice; Editing by Tim Pearce)