Britain's biggest banks are poised to pay out a combined £6bn in bonuses despite government demands for restraint on City pay.The size of the payout will embarrass George Osborne, the chancellor, who is hoping to announce a peace deal with the City this week that will include targets for lending to small businesses and curbs on pay. Senior sources said yesterday that the talks, codenamed Project Merlin, could still founder. They will not be helped by the disclosure that Barclays, HSBC, Royal Bank of Scotland and Standard Chartered are lining up big paydays for their traders and investment bankers, reports the Sunday Times.After umpteen calls for restraint by ministers, weighing the public relations impact, and consulting colleagues and advisers, Barclays chief executive Bob Diamond has made his most difficult decision. The multi-millionaire is set to accept a £9m bonus, one of the largest in the world, and will be followed by the bosses of the other major banks, the Sunday Independent reports.Stuart Gulliver, the new chief executive of HSBC, is expected to accept a bonus of as much as £9m later this month in reward for his stewardship of the bank's investment arm. Mr Gulliver, who took over from Mike Geoghegan at the turn of the year, is set to be awarded the windfall as part of an overall compensation package which could take the total amount he receives for 2010 to in excess of £10m, the Sunday Telegraph reports.BP has hit back against its Russian partner in the legal battle over its £10bn deal with Rosneft, accusing it of holding the company to ransom and starting a spurious legal action, The Sunday Telegraph writes. The counter-allegations - strongly denied by the Russians - show how fiercely BP is privately fighting over the Rosneft deal. The billionaire investors in TNK-BP - Mikhail Fridman, Len Blavatnik, German Khan and Viktor Vekselberg - are trying to halt the share-swap.Tony Hayward, the former BP chief executive, is in talks to launch a new oil company backed by Abu Dhabi's sovereign wealth fund. Representatives for the emirate are believed to have approached Hayward in recent weeks with an offer to bankroll him with several billion dollars to build a global oil and gas group. A source close to the situation said Abu Dhabi's proposal was in its early stages, and that it was one of several Hayward was considering, the Sunday Times reports.David Cameron has ruled out making "significant" personal tax cuts as ministers battle to cut Britain's record deficit. In an interview with The Sunday Telegraph the Prime Minister says the growing demand to reduce the tax burden for millions of families, facing higher prices and the threat of job losses, "does not add up" in the current climate. He also rules out a "Plan B" on economic policy in the wake of official figures showing the economy shrinking by 0.5% in the final quarter of last year, which sparked fears of a double-dip recession, the Sunday Times reports.Wealthy non-doms are facing a crackdown on their tax perks as the Treasury seeks new sources of revenue to spread the financial pain. George Osborne, the chancellor, is considering a new levy on Britain's 120,000 non-doms, which he could signal as early as next month's Budget. It would be used to help lift the income tax threshold for the lowest-paid to £10,000 and reduce the burden on the middle class, the Sunday Times reports.One of the inventors of Viagra has slammed the decision by Pfizer, the American pharmaceuticals company, to close its giant research centre at Sandwich, Kent, where the sex drug was invented. Simon Campbell, previously a senior executive at Pfizer, the world's biggest drugs company, and a key member of the team that developed Viagra, said: "It is difficult to understand the closure of Sandwich, which was the most productive [research site] in the world. "The position of the UK as a centre of excellence for pharmaceutical research has been significantly compromised," the Sunday Times reports.Pfizer's decision to close its UK drug research and development unit with the loss of up to 2,400 jobs is likely to be followed by widespread retrenching of pharmaceutical companies from drug discovery programmes, Shire chief executive Angus Russell has warned. In an interview with The Sunday Telegraph, Mr Russell claims that the drugs industry is at a similar stage to the chemicals business 30 years ago, when failure to adapt to global competition saw some of the biggest names enter terminal decline.Fears of a leap in oil prices mounted this weekend as Hillary Clinton warned that the mass unrest in Egypt could spread to other oil-producing Middle East states. "The region is being battered by a perfect storm of powerful trends," the US secretary of state said in Munich. "This is what has driven demonstrators into the streets of Tunis, Cairo and cities throughout the region. The status quo is simply not sustainable." The price of Brent crude last week breached $100 for the first time in two years, ending the week at $99.83 a barrel as protests against the regime of President Hosni Mubarak plunged the country into chaos. A gas pipeline to Israel was shut down yesterday after it was attacked by saboteurs, the Sunday Times reports.Rio Tinto is this week expected to announce plans to return billions of pounds to shareholders thanks to the commodities boom, which has doubled its profits. Analysts expect the mining giant to report on Thursday that it made underlying profits of nearly £9bn in 2010, up from £4.3bn the previous year. BHP Billiton, Rio's big rival, is expected to reveal record results next week alongside a multi-billion-pound share buyback programme. The spectacular returns to shareholders are the result of the rapid increase in raw material prices that is gripping the world economy, the Sunday Times.Seven of Britain's leading airlines have warned the government not to sell Nats, the national air traffic control service, arguing that the system is a key strategic asset not suitable for full privatisation. In a letter obtained by the Observer, the Airline Group warns of "highly damaging" consequences if the state sells its 49% stake, an option under consideration by transport secretary Philip Hammond, the Observer reports.Listed property company British Land is stepping up its retail exposure by buying a Barnstaple shopping centre and a retail development site in Luton, and by bidding for a £150m stake in a scheme in Bath. The move into investing in smaller towns and cities flies in the face of research that warns many smaller retail areas will suffer, the Sunday Independent reports.
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