Pendle MP, Gordon Prentice, is calling for an urgent review of the honours system. He claims that people get honours but never seem to lose them except for treason and the most blatant corruption.

The MP says it is inappropriate for Sir Fred Goodwin, the former boss of the Royal Bank of Scotland, who presided over the biggest corporate loss in British commercial history to keep the knighthood he was given in 2004 for "services to banking".

Speaking from Westminster, the MP said: "His hand was on the tiller when he steered the RBS onto the rocks."

"I am against "name changing" honours – the knighthoods and the dame hoods and all the rest- but so long as we have them there should be a mechanism for forfeiting them where the circumstances warrant."

A Forfeiture Committee consisting of the Cabinet Secretary, Treasury Solicitor, Permanent Secretary to the Home Office and Permanent Secretary to the Scottish Executive makes recommendations on any proposed forfeiture to the Prime Minister who passes it to the Sovereign.