Salaries in the banking sector are too high, the chairman of the Royal Bank of Scotland said on Friday.

Sir Philip Hampton, the head of the state-owned bank, told the BBC Radio 4 Today programme that pay levels "need to be corrected".

"Pay has been high for too long ... particularly in the banks, particularly in the investment banks, shareholders have done pretty badly and employees have done pretty well certainly over the last 10 years," said Hampton.

"That needs to be corrected. It actually isn't a society or fairness issue, it's a straightforward business issue. Too much of the money has not been going to the right place," he added.

Hampton and RBS chief executive Stephen Hester gave up their £1 million plus bonus packages last week following public and political pressure.

The chairman said RBS had underestimated the scale of the public outcry over the bonuses, but added that, compared to many other banks and businesses, salaries at RBS were not that high in relative terms.

Media reports that the RBS board had threatened to resign as a result of the bonus payment row were incorrect, Hampton added.

"That threat was never raised," he said.