Banks should be forced to curb pay and bonuses as a quid pro quo for any tax­payer-funded recapitalisation, George Osborne, the shadow chancellor, told MPs on Monday.

The Tories’ support for an effective part-nationalisation of the banking sector, and the “anti-greed” caveats they want to see imposed, show how far the opposition party has moved in less than a month. From initially opposing a ban on short selling, Mr Osborne has now embraced much greater state intervention in banks.