By Charlotte Beugge

The men in charge of Britain's biggest bankers were summoned to the offices of the Financial Services Authority (FSA) to discuss how they could penalise executives who were involved in the sale of payment protection insurance (PPI).

Britain's top bankers including Stephen Hester of RBS, who turned down his £3.6 million share bonus, Barclays' Bob Diamond and Lloyds Banking Group's Antonio Horta-Osario, attended a meeting with the chairman and chief executive of the FSA.

That is according to broadcaster Sky, which says there was a broad discussion of regulatory reforms, the hot debate was on how - and if - the bonuses paid to those involved in PPI could be taken back.

PPI was sold alongside loans and credit cards and was meant to cover payments should the policyholder be unable to work due to illness or unemployment.

But the cover was useless for many who were sold it - some were self-employed and thus could not claim under unemployment, others had pre-existing illnesses. As a result, the banking industry set aside nearly £6 billion to compensate those mis-sold cover.

Sky says that at the meeting Hector Sants, chief executive of the FSA, said that "the past pay of those in the PPI 'chain of command' should be robustly targeted by the high street lenders".

However the report adds that reclaiming such payments could be very complex.