Prime Minister David Cameron on Monday urged majority state-owned bank Royal Bank of Scotland to show restraint on executive bonus payments in future, after intense political pressure caused RBS' boss to waive his 2011 bonus.

What needs to happen is a sense of restraint which is exactly what the government urged on RBS in the first place, Cameron told reporters in Brussels after a meeting of European leaders.

I think they've got to do a better job, as everybody has, to demonstrate how pay is linked to performance.

Britain owns around 83 percent of RBS after bailing out the bank during the 2008 credit crisis, with some 45 billion pounds ($70 billion) of taxpayers' money injected into RBS.

On Sunday, RBS said that Chief Executive Stephen Hester had decided to waive a bonus worth almost a million pounds after the payout angered Britons bearing the brunt of government austerity measures.

Cameron's spokeswoman said on Monday that bonus payments remained a matter for RBS' board rather than the government, but sources within RBS have told Reuters that the Scottish bank has been concerned by the political row over Hester's bonus.

The Financial Times reported in its Tuesday edition that RBS Chairman Philip Hampton and Penny Hughes, who heads the RBS remuneration committee, were in talks over the bank's pay and bonus policy, as RBS seeks to avoid a repeat of the Hester bonus row.

The Daily Telegraph also reported that five of RBS' top investment bankers could be in line for a bumper bonus payout worth a total of 30 million pounds.

RBS declined to comment on the FT and Telegraph reports.

(Reporting by Matt Falloon, Sudip Kar-Gupta, Adrian Croft and Steve Slater; Editing by Steve Orlofsky)