Goldman Sachs has scrapped plans to delay paying bonuses to its bankers in Britain to exploit an income tax cut for top earners after Bank of England Governor Mervyn King criticised the move.
Earlier, Mr King chided the US investment bank for considering a delay in bonuses until after April 6 when the top tax rate falls to 45 percent from 50 percent.
A source said the delay had been under consideration but that the bank had decided against it.
Goldman Sachs declined to comment.
Mr King's intervention ratcheted up the pressure on Goldman, which sparked a furore last week when the bank's plan emerged.
"I find it a bit depressing that people who earn so much seem to think that it's even more exciting to adjust the timing of it to get the benefit of the lower tax rate," King told a panel of British lawmakers when asked about Goldman's plan.
The head of the central bank said that while Goldman's plan was not unlawful, the tax reduction was being done at a time when the rest of society was suffering from the consequences of the global financial crisis.
Britain had to shore up and nationalise banks during the 2007-09 crisis, which has sparked public anger over bonuses at a time when the government is freezing public pay and cutting expenditure.
Finance minister George Osborne, who introduced the reduction to the top rate of tax, has come under pressure from campaigners to prevent banks such as Goldman from avoiding tax by delaying their bonuses.
Mr King told parliament's Treasury Select Committee it was "clumsy" to pay bonuses in such a way and betrayed a lack of attention to how others might feel.
Goldman's plan touched on two sensitive issues that have triggered public anger in Britain: the size of bankers' bonuses and why large international firms like Starbucks and Amazon have been able to pay so little UK tax in recent years.
Goldman recently brought forward payments of deferred stock to executives in the United States to 2012 to beat tax hikes implemented for top earners this year.
