LONDON - Royal Bank of Scotland boss Stephen Hester will receive a bonus of 963,000 pounds, or $1.51 million, for last year, a decision by the government-owned bank that has been strongly criticized.

UK Prime Minister David Cameron Thursday night reluctantly approved the bonus believing that Hester has done a good job.

The bank is 82 per cent owned by UK taxpayers and the company which runs it for the government said the bonus reflected Hester's work 'towards rebuilding RBS.'

The controversial bonus, less than half Hester's 2010 payout, comes despite RBS plans to slash more than 4,000 jobs and shut down its investment banking business. It has drawn much public and political flak.

But the political furore may only just be beginning.

The bonus awarded to Hester is "absolutely bewildering", Boris Johnson, the mayor of London, said.

Liberal Democrat minister Jeremy Browne said Hester was "a public servant" and should turn down the bonus while the Unite union said it was "disgusting".

Browne Thursday night reflected public anger on BBC's Question Time when he said Hester had a "moral duty" to waive the bonus.

"There is a question of honour. Even if there is a contractual opportunity for him to have a bonus it does not mean he has to accept it."

Browne pointed out that Hester was being paid more in three days than a soldier serving in Afghanistan received in a year.

Following a speech on "moral" capitalism last week, Cameron was asked whether he would act to stop the bosses of state-owned banks receiving 1 million pounds bonuses. He replied: "The short answer is yes."