The 'court of public opinion' is against the ex-RBS chief, the deputy Labour leader said.
Government pressure continues to grow on Sir Fred Goodwin, as ministers urge him to give up his £650,000 per year pension.
The retirement plan already being drawn by the former chief executive of RBS, 50, came to light last week. Sir Fred is widely blamed for helping formulate a risky business plan at the bank while in charge there, leaving it exposed in the credit crunch and in need of £20 billion of emergency bailout funds.
Last week, RBS announced 2008 losses of £24 billion, the largest annual loss in UK corporate history. It also said that around £300 billion of liabilities on its balance sheet would be put into a government insurance scheme, which could mean that 95 percent of the bank becomes government-owned.
Chancellor of the exchequer Alistair Darling said that Sir Fred should give up the pension last week - but the retired executive responded in a letter, saying that he would do not so and that ministers had previously approved the retirement deal. Over the weekend, deputy Labour leader Harriet Harman said that the pension was not justifiable in the "court of public opinion" and hinted that the government would take action to take the money back.
Speaking to the BBC, she added: "Sir Fred Goodwin should not count on being £650,000 a year better off because it is not going to happen … It might be enforceable in a court of law, this contract, but it is not enforceable in the court of public opinion and that is where the government steps in."
