The Royal Bank of Scotland is poised to shed thousands of jobs after reporting a record pre-tax loss of £40 billion.

The troubled bank that is more than 70 per cent owned by the taxpayer said that uncertainty for staff was "not over". Experts have suggested that eventual job losses could be as high as 20,000 worldwide.

New chairman Sir Philip Hampton and chief executive Stephen Hester are driving radical change at the bank that has become a byword for banking failure.

The dismal result, the biggest loss in British corporate history, came as Mr Hester’s predecessor Sir Fred Goodwin - nicknamed Fred the Shred for his ruthless methods - began pocketing his £650,000-a-year for life pension.

Sir Fred, 50, has been widely blamed for the bank’s disastrous performance and his generous pension payout condemned as an outrageous reward for failure.

Chancellor of the Exchequer Alistair Darling revealed on the BBC on Thursday that Sir Fred had been asked to re-consider his decision to take the pension, and that lawyers were looking at the situation.

Sir Philip warned that "many of our people will be affected by the steps we must take to restore RBS to strength".

He added that a worsening economic environment in 2009 would present significant challenges, and that "the path to recovery will be neither smooth nor straight".

The parlous state of RBS finances was caused mainly by the ill-timed takeover of Dutch bank ABN - AMRO, as well as reckless investment in risky funds.

Mr Hester said the bank had to change in a far-reaching way but it would take up to five years to execute the bank’s strategic plans. These would focus on long-term quality profitability.

Some overseas operations would be reduced or shut, and the bank has already announced it is pulling out of its sponsorship of the Wililams Formula One motor racing team in 2010 when its deal, thought to be worth £12million a year, comes to an end.