LONDON (Reuters) - The government has asked former Royal Bank of Scotland chief executive Fred Goodwin to forego his annual pension of £650,000 ($992,000), Chancellor Alistair Darling said yesterday.

RBS reported a loss of £24.1 billion for 2008 yesterday, the biggest in British corporate history. The government has a direct stake of 70 percent in RBS after bailing it out.

"I think people will find it very difficult to understand how you can get paid £650,000 a year for the rest of your life when just look at the state that RBS is in at the moment," Darling told BBC Radio 4.

"You cannot justify these excesses, especially when you've got such a failure of this magnitude," he added.

Goodwin, 50, quit as the head of RBS last October when the bank was forced to take £20 billion in emergency state funding.

Goodwin was regarded as one of the world's top bankers after a string of acquisitions made his Edinburgh-based bank one of the world's biggest across Europe, the United States and Asia.

But his takeover of Dutch bank ABN AMRO in October 2007 proved a deal too far — it was ill-timed, ramping up investment banking exposure and eroding capital just as the financial crisis took hold.

"At my request, my ministerial colleague Lord (Paul) Myners spoke to Sir Fred yesterday and put it to him quite simply, 'look in the circumstances in which this bank is now in, do you not think it right that you should forego this'," Darling said.

Goodwin had not yet replied, he said. John McFall, chairman of parliament's Treasury committee, said the pension was "a scandal".

"Who signed that agreement for Sir Fred? The public have got a right to know these answers because this is an example of hubris on Sir Fred's part — bringing a once proud institution down to its knees and then leaving with not just a good pension, but a pension which is eye-watering in terms of its sums."