Just 18 months ago, Sir Fred Goodwin, the chief executive of Royal Bank of Scotland (RBS) and one of the country's most respected businessmen, was riding high.

The bank, which the 50-year old qualified accountant had presided over since 2000, had clinched a hard-fought battle for control of ABN Amro, the Dutch bank, after trouncing its rival, Barclays.

As RBS divided up the spoils with its bid partners, Santander and Fortis, Sir Fred may have congratulated himself on pulling off another stunning corporate coup, mirroring the bank's audacious takeover of Natwest in 2000.

However, just three months ago, in October, Sir Fred left the bank under a dark cloud that has now mushroomed into a thunderstorm.

The Prime Minister today lambasted the bank for a strategy that saw it acquire ABN Amro as the global financial sector was plunging into the worst downturn for decades while its risk-taking reputation resulted in potentially catastrophic exposure to the US sub-prime market.

The tongue-lashing from Mr Brown will be particularly hard to take for Sir Fred.

Schooled in Paisley before joining Glasgow University to study law, Sir Fred has a similar background to the Prime Minister’s and had enjoyed a good relationship with the Government. Not any more.

The race to acquire ABN Amro has been Sir Fred's undoing.

Until then, he had operated with a fearsome reputation, gaining the moniker Fred 'the Shread' for his job cutting propensity, which stretched as far back as when he was chief executive at Clydesdale Bank and Yorkshire Bank in the 1990s.

Perhaps his nickname could also be attributed to his style of doing deals. Like ABN Amro, where he swooped in to push out rival, Barclays, in 2000, Bank of Scotland made a move for Natwest only for RBS to soon elbow it aside.

While both deals were audacious, the Natwest acquisition was a smart move at the right time in the market.

The ABN Amro bid, on the other had, seemed like a man trying to recapture past glories, and failing. The bank Sir Fred had helped build up to a global player, with staff growing from 30,000 to 170,000, will soon be 70 per cent owned the Government, and faces the prospect of being nationalised.

Once lauded for his business acumen, Sir Fred was dubbed the “World’s Worst Banker” last month by Newsweek magazine and there are several e-petitions set up by angry members of the public to have his knighthood revoked.

As well as his reputation, Sir Fred's personal fortune is also suffering.

In 2000, after the takeover of NatWest, RBS’s board rewarded him with a £2.1 million annual salary, including a bonus of £814,000 for the takeover — more than any other UK bank chief received that year.

It paled in comparison with his £2.86 million bonus in 2007. As he has waived any payoff from the bank, there won’t be anything like as much coming into his bank account for a while — certainly not from his RBS shares.

On the day his departure was announced, Sir Fred said he was "sad", adding: "Nobody will ever tell you that they feel good the day they have to step down.”

Investors in RBS will be feeling a lot worse than that today.

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