The chief executive of bailed-out lender Royal Bank of Scotland, already under political pressure to give back a 1 million pound bonus for 2011, could get eight times as much in future under his current contract.

RBS CEO Stephen Hester could theoretically receive an 8 million pound bonus under a long-term incentive plan that gives him a maximum of 375 percent of his annual 1.2 million pound salary, along with other share plans in place, based on RBS' recent stock price of 28 pence.

RBS, 83 percent owned by the government after a state bailout during the 2008 credit crisis, said this week that Hester's 2012 share award and long-term incentive plan would continue in line with a policy set out in 2010.

RBS declined to comment on the situation on Sunday.

Anger over bankers' pay has shown few signs of abating, with many still set for million pound salaries while elsewhere thousands lose their jobs in a weakening global economy.

In Britain, the salaries at RBS and Lloyds are particularly controversial since both banks were bailed out with 66 billion pounds of taxpayers' money during the crisis. As well as its RBS stake the government owns 40 percent of Lloyds.

BOARDROOM PAY

RBS halved Hester's stock bonus for 2011 to just under 1 million pounds from 2 million in 2010. It resisted calls to axe Hester's bonus altogether, although it waived a 1.4 million pound bonus for its chairman Philip Hampton.

Senior opposition Labour politician Liam Byrne reiterated calls on Sunday for Prime Minister David Cameron to intervene over Hester's bonus.

This is a bank that the government owns almost all of, the government is the biggest shareholder. Mr Cameron has been talking about how shareholders need to flex their muscles and have a bigger say in the way that executive pay is set, Byrne told Sky News.

Fine - let's keep you to your word, step in now and say that this bonus payment to Mr Hester is wrong and should be stopped, he added.

However, cabinet minister Iain Duncan Smith said intervention would be difficult, adding that the RBS pay contracts had been set under the previous Labour government.

You can't interfere and tell them what to do. And if we did not like that, the only option would be to get rid of the board. If you do that, imagine what would happen in the banking sector, and imagine what would happen to RBS. You would have chaos, he told the BBC.

Duncan Smith also reiterated Cameron's stance that it was up to Hester to decide if taking the bonus was appropriate or not.

Hester, a former Abbey National and Credit Suisse banker, joined RBS in October 2008 from property company British Land as RBS was reeling from its disastrous acquisition of Dutch bank ABN AMRO and the effects of the credit crisis.

Britain used some 45 billion pounds of taxpayers' money to rescue RBS, leading to the eventual resignation of former head Sir Fred Goodwin, who was replaced by Hester.

Hester was given a brief to restructure RBS and restore its fortunes, and his tenure has seen RBS cut more than 30,000 jobs.

Britain aims to eventually sell its state holdings in RBS and Lloyds back to the private sector, although volatile markets have meant the timing of any disposal is uncertain.

(additional reporting by Tim Castle; Editing by Sophie Walker)