The UK Chancellor of the Exchequer today ended swirling uncertainty over plans to tax banking bonuses by giving financial firms the choice of deploying their profits on rebuilding their capital or spending them on staff bonuses and incurring a one-off supertax.

Alistair Darling, delivering his pre-Budget report speech this afternoon, said: "This should be a time for banks to rebuild their capital base and become stronger. A tax on profits, as has been suggested, will prevent them from doing this. So I have decided against a windfall tax.