The "vilification" of RBS chief Stephen Hester and intervention over bankers' bonuses is not in the "long-term public interest", according to CBI head Sir Roger Carr.

Writing in The Times, the president of the business group says Hester is a "talented man", adding: "In today’s world, more than ever, doing the right thing is also the right thing to do in business."

His intervention comes after David Cameron said the bank should show "restraint" in its bonus packages for bankers, saying: "They have got to have proper regard in terms of restraint when they have had so much money from the taxpayer and they have made so many mistakes in the past."

Hester turned down his bonus on Sunday night after Labour said they would hold a parliamentary vote on the issue. The party still plan to use a debate next week to discuss the issue of payouts in the City.

On Tuesday morning, Labour leader Ed Miliband said it would be wrong to give into to "empty threats" from industries that are "too big to challenge."

“I’m very worried about the fact that this bonus culture hasn’t ended. And I think people aren’t against rewards for success, but I think that people feel that what’s happened is that there’s now just a culture where a bonus is almost automatic – just for doing your job. That was the problem in the case Mr Hester – after all the Royal Bank of Scotland wasn’t meeting its targets for small business lending and other things,” he told ITV's Daybreak.

On Monday a Downing Street spokesperson said David Cameron will not stop the Royal Bank of Scotland awarding other bonuses to its executives.

The chairman of RBS, Sir Philip Hampton, announced on Saturday that he would not receive a shares bonus worth £1.4m as it would be inappropriate.