LONDON - Britain took the rare step of stripping former Royal Bank of Scotland chief Fred Goodwin of his knighthood, following intense criticism of his role in RBS' near-collapse during the 2008 credit crisis, and public anger towards wealthy bankers.
"The failure of RBS played an important role in the financial crisis of 2008-9 which, together with other macroeconomic factors, triggered the worst recession in the U.K. since the Second World War and imposed significant direct costs on British taxpayers and businesses," the government said in a statement.
"Fred Goodwin was the dominant decision maker at RBS at the time," the statement added. "In reaching this decision, it was recognised that widespread concern about Fred Goodwin's decisions meant that the retention of a Knighthood for 'services to banking' could not be sustained."
Goodwin was awarded the knighthood in 2004 but resigned in October 2008 as the bank was failing, provoking the public's fury by leaving with 16 million pounds ($25 million) in pension benefits. Billions in taxpayer funds were used to bailout the stricken bank.
The government said it would soon be announced that Goodwin's knighthood had been "cancelled and annulled."
The Scottish banker spearheaded RBS' disastrous acquisition of Dutch bank ABN AMRO, which nearly caused the collapse of RBS during the 2008 crisis.
RBS ended up having to be propped up with 45 billion pounds ($71 billion) of taxpayers' money, with the government finishing up with an 83 percent stake in the bank.
Goodwin told a committee at the House of Commons that he "could not be more sorry" for what had happened at RBS, BBC reported.
It is very rare for Britain to remove people of their knighthoods, and Goodwin joins the ranks of figures such as former Romanian dictator Nicolae Ceausescu who forfeited an honorary knighthood.
The woes of RBS have come to symbolize for many in Britain more serious problems with the country's banking industry.
Many are still angry at the fact that bankers are continuing to get paid millions while elsewhere thousands lose their jobs as the economy weakens.
On Sunday, the current chief executive of RBS - Stephen Hester - was forced to decline a million pound share bonus after the award had been attacked by all major British political parties.
Reuters, The Associated Press and msnbc.com staff contributed to this report.
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