Did Sir Fred hire man to stuff machine full of his banknotes or is minister out to further blacken his name?
The former chief executive at the Royal Bank of Scotland is said to have employed a member of staff whose sole job was to ensure cash machines at the bank's headquarters only dispensed notes bearing his name.
The claim – which, if true, would verge on the megalomaniacal – was made yesterday by City Minister Lord Myners, who has been involved in a long controversy over the extent of his knowledge of the 703,000-a-year pension deal for Sir Fred when he agreed to step down last autumn.
Lord Myners made the startling claim during Question Time in the House of Lords yesterday. He said: "I have been advised that in the Royal Bank of Scotland's headquarters in Gogarburn, Sir Fred Goodwin employed somebody whose sole job it was to ensure that the bank notes dispensed from automatic telling machines in that headquarters building bore his signature and his signature alone."
Every note issued by the Royal Bank of Scotland carries the signature of the chief executive, yet as each note has a shelf life of between five and seven years there would have been a period when many notes carried the signature of Sir Fred's predecessor, Sir George Mathewson, who stepped down in 2001.
As bank cash machines do not always carry the latest notes, a member of staff would be needed to check the signature on each one.
Yet last night questions were raised over the veracity of the minister's comments and whether he was trying to salvage his position by further blackening the name of "Fred the Shred".
A senior source at the Royal Bank of Scotland last night dismissed the allegation and hinted that it was the result of long-standing animosity between the two individuals.
The source said: "Fred stories are becoming apocryphal and in this instance the suggestion is ever more fanciful." The City Minister made the claim after Labour's Lord O'Neill of Clackmannan asked him: "Can you confirm that those notes issued by the Royal Bank of Scotland that bear the signature of Sir Fred Goodwin are worth 20, or however much they say, and that if any of us happens to find ourselves in Scotland with such notes we are able to use them to the full extent of their value?"
Lord Newby, for the Liberal Democrats, said that although Sir Fred was no longer signing bank notes, "he is still receiving them in very copious quantities".
He asked: "Is the government pursuing any legal course against Sir Fred Goodwin to try and slow his personal money supply in the period ahead?"
Lord Myners replied: "The government, through the ag-ency UK Finance and Investments which holds shares in the Lloyds Banking Group and Royal Bank of Scotland on be-half of the public, has asked Royal Bank of Scotland's existing boards to explore legal channels and to ensure that the payment of the pension to Sir Fred Goodwin is in accordance with rules of the scheme and the terms of his contract.
"Advice is currently being received from counsel and it will be for the new board of the Royal Bank of Scotland to take whatever action it judges to be necessary, in the light of that advice, to protect the interests of the Royal Bank of Scotland and through that UKFI and the general public as investors in Royal Bank of Scotland."