Royal Bank of Scotland (RBS) chairman, Sir Philip Hampton, has waived the £1.4 million share reward he was due to receive later this year, according to reports from the BBC.

The broadcaster's business editor Robert Peston claims that Sir Philip told the bank's remuneration committee it would not be appropriate to receive the 5.17 million shares.

The revelation follows calls from Labour leader Ed Miliband to block the £963,000 bonus for RBS chief Stephen Hester, cutting against the position of Chancellor George Osborne who has ruled out voting against it at April's AGM.

He claims the award could only be blocked if the government bought the remaining shares in the bank, which would ultimately cost the public purse more.

The plans sparked public anger of Friday but counter views have come from some City commentators and politicians, including MP Mark Field who said Hester should not be 'vilified' as he was responsible for managing £45 billion of public money.

However, Liberal Democrat MP Jeremy Browne pointed out that Hester's bonus, together with his £1.2 million salary, would mean he earns more in three days than the £17,265 a private soldier takes home in a year. 'There's a question of honour,' Browne declared, describing Hester as a public servant.

London Mayor Boris Johnson described the award as 'bewildering' and called for the bank to be run on public sector lines.

Depite the fact that the bailed-out bank is 82 per cent taxpayer-owned, ministers have previously said their hands are tied after the contract was agreed by the last government.

In a written statement released on Saturday, the Miliband said: 'Rather than defend his decision to nod through a one million pound bonus for Stephen Hester, the prime minister has gone to ground. George Osborne has just told me the government will not vote against Stephen Hester's bonus as a shareholder at the April AGM.

'That process was established by the previous government and that process is reflected in a bonus which is less than half the bonus Stephen Hester was paid last year. The public sector shareholder has taken a keen interest in this and has had an influence on it.'

This was written for our sister website, Interactive Investor