Sir Fred was knighted by Gordon Brown for 'services to banking' Reuters)
Goodwin was knighted on the advice of Gordon Brown for 'services to banking' (Reuters)

Disgraced banker Sir Fred Goodwin could lose his knighthood amid growing calls from MPs across the political spectrum to have him stripped of the honour.

Goodwin was knighted in the Queen's 2004 Birthday Honours list for services to banking just as he was guiding the Royal Bank of Scotland (RBS) towards the biggest bailout in history.

Prime Minister David Cameron in understood to be sympathetic to the cross-party demands for the honour to be withdrawn.

RBS was kept afloat using £45bn of taxpayers' money and remains 83 percent owned by the state.

Goodwin led RBS to the brink of collapse after aggressively expanding it. That included a £50bn "gamble" to acquire Dutch bank ABN Amro in 2007, which contributed to its downfall.

Despite been blamed for the near collapse of RBS, Goodwin still received a £342,500-a-year pension on top of a £2.8m tax-free lump sum.

It is understood that MPs were calling for his knighthood to be referred to the Forfeiture Committee, a Whitehall body entrusted with safeguarding the honours system.

The knighthood is understood to have been discussed by the committee in 2009 shortly after the RBS bailout but no action was taken.

Since 1995, 34 people have been stripped of their honours. These include Zimbabwean dictator Robert Mugabe, champion jockey Lester Piggot, who was stripped of his OBE after serving 12 months in prison for a £2.8 million tax fraud, and former world champion boxer Prince Nazeem Hamed over a dangerous driving conviction.

MPs who have suggested Goodwin's knighthood revoked include Tory MP Matthew Hancock and Labour frontbencher Emily Thornberry.