Cable 'set to lose battle over bank bonuses'

British banks will escape a major clampdown on bonuses due to the controversy surrounding Vince Cable, ministers have suggested.

The business secretary has repeatedly called for tough action to curb excessive payouts in the City, but his position in the Cabinet was severely weakened by revelations surrounding his attack on media tycoon Rupert Murdoch this week.

One Conservative minister said on Thursday (December 23rd) that the Liberal Democrat MP "has not got the clout he had 48 hours ago".

Mr Cable was stripped of his powers to regulate the media following the publication of his comments about Mr Murdoch, but remains responsible for corporate governance.

Nevertheless, a Liberal Democrat source admitted that the incident was "very damaging to his cause on the banks".

The business secretary is believed to hold different views to George Osborne on the issue of bank bonuses, with the chancellor concerned that strict unilateral measures could harm the economic recovery and drive major firms overseas.