Former Royal Bank of Scotland Fred Goodwin has had his knighthood removed, it was announced today.

The Cabinet Office said the award had been “cancelled and annulled”.

Mr Goodwin, who received his knighthood for “services to banking”, subsequently led the Royal Bank of Scotland to the brink of collapse.

The Cabinet Office said the knighthood had been removed on the advice of the Forfeiture Committee because Mr Goodwin had brought the honours system “into disrepute”.

It said his record as chief executive of RBS, which had to be bailed out by taxpayers in 2008, meant it was “an exceptional case”.

“In 2008 the Government had to provide £20bn of new equity to recapitalise RBS and ensure its survival and prevent the collapse of confidence in the British banking and payments system. Subsequent increases in Government capital have brought the total necessary injection of taxpayers’ money in RBS to £45.5bn,” the Cabinet Office said in a statement.

“Both the Financial Services Authority and the Treasury Select Committee have investigated the reasons for this failure and its consequences.

“They are clear that the failure of RBS played an important role in the financial crisis of 2008-9 which, together with other macroeconomic factors, triggered the worst recession in the UK since the Second World War and imposed significant direct costs on British taxpayers and businesses.

“Fred Goodwin was the dominant decision maker at RBS at the time.

“In reaching this decision, it was recognised that widespread concern about Fred Goodwin’s decisions meant that the retention of a Knighthood for ‘services to banking’ could not be sustained.”

The Forfeiture Committee met last week to consider the issue. Its recommendation to strip Mr Goodwin of the honour was conferred to the Queen by prime minister David Cameron, the Cabinet Office said.

“The scale and severity of the impact of his actions as CEO of RBS made this an exceptional case,” it said.

PA