THE head of the Financial Services Authority (FSA) has defended bonuses being paid this week to staff at nationalised bank Northern Rock.

Liberal Democrat economics spokesman Vince Cable called yesterday for the "indefensible payments" to be halted - saying "they were bringing the worst of the City bonus culture into a public body".

Most of the bank's 4,500 staff will receive ten per cent of their salary under an agreement approved by the Treasury last year involving targets for repaying the taxpayer-funded loan that rescued the bank.

But Lord Turner said: "Those people were given a promise and it is important to realise that these are not fat cat bonuses of millions, these are ordinary workers who have done the job that they have been told to do which was the job people thought was the sensible thing at the time.

"It would be unfair not to give what are relatively modest sums of money and completely detached from fat cat bonuses in trading rooms."

What do you think? Is Lord Turner correct?