The opposition Labour Party is calling on banks to exercise restraint in the annual bonus round, warning on Friday that a culture of excessive bonuses has been corrosive.

At a speech hosted by Thomson Reuters, Labour leader Ed Miliband commended Royal Bank of Scotland Chairman Philip Hampton for his decision to waive his bonus at the state-backed bank.

I think all banks should show restraint, Miliband said, adding that private banks also have an implicit government guarantee and This bonus culture has ultimately been corrosive.

Hampton said on Friday that pay in the banking sector had been too high for too long.

Miliband stopped short of making specific demands on individual bankers. Attention will focus next week on Barclays American CEO Bob Diamond who could get a 3.4 million pound ($5.4 million) bonus for 2011.

Miliband, who has struggled to make an impact since he became centre-left Labour leader in 2010, has struck a chord with his attacks on bonus payments.

The Conservatives, the dominant party in Britain's coalition government, are traditionally the party of big business but their leader, David Cameron, has also criticised excessive executive pay at a time when Britons are seeing their living standards decline.

The bonus issue came to a head in recent days when RBS chairman Hampton gave up his bonus and CEO Stephen Hester bowed to political pressure and followed suit.

Former RBS CEO Fred Goodwin was also stripped of his knighthood, confirming his pariah status for a disastrous expansion that brought the bank to its knees.

LABOUR RESCUE

Miliband proposed allowing ordinary workers to sit on committees deciding pay and renewed attacks on banks for failing to support small businesses.

The previous Labour government bailed out RBS and Lloyds Banking Group in 2008-09, leaving the state with around 83 percent of RBS and a 40 percent stake in Lloyds.

My party has accepted responsibility, along with governments around the world, for not doing more to prevent the crisis with regulation, Miliband said.

Miliband drew a direct link between the bailout and cuts in government services.

People who did not cause the financial crisis are paying the price. And many feel that those who did cause the financial crisis are not, Miliband said.

Financial services still account for more than 10 percent of the national economy despite coalition efforts to rebalance towards sectors like manufacturing. Miliband said he wanted banks to reform and was not seeking to drive bankers into exile.

The investment banking sector is important but it is not immune from the need to show responsibility, Miliband said.

The Labour Party will seek a vote in parliament on Tuesday on imposing a new tax on bankers' bonuses, although it stands little chance of success.

This is a long-standing proposal from Labour which has said its proposals to tax banks would raise about 2 billion pounds.

After winning the 2010 election, the coalition replaced Labour's tax on bankers' bonuses with a bank levy.

(Editing by Andrew Callus)