Gordon Brown has warned the bonus culture in British banks “got to change” as he visited Coventry.

The Prime Minister was in the West Midlands to promote measures taken by the Government to help businesses and the public get through the recession.

But he was urged to put an end to the practice of banks paying massive bonuses, as he took questions from business leaders in the city.

Speaking at a question-and-answer session at Coventry University, he said that in future there should be no rewards for short-term deals.

He said: “Our policy is no rewards for failure. There should be no bonuses for short-term deals, the sort of things that happened in the past.

“The banks are only there for one purpose -- to serve the community. They are stewards of people’s money, and they shouldn’t be speculators with people’s money.”

The Prime Minister said the public was “rightly” angry about the way the banks had operated, leading to a multi-billion pound bail-out by the taxpayer, and promised that the regulatory system would be overhauled.

“The reason people are angry in this country, rightly, is that we know in every other area what is valued is hard work, it is effort, it is showing enterprise, it is taking responsibility,” he said.

“It should never be irresponsible risk-taking, and irresponsible and excessive behaviour and that is what we have got to root out.

“They are stewards of people’s money and they should not be speculators in people’s money. What we have got to do now is to make sure that in the lending the banks do that they are absolutely responsible.

“We will do everything we can to repair the banking system and make sure that people can have the confidence that is necessary for our economy to flourish.”

His comments came at the end of a week which has seen seen public attention focused on the role of the banks in the current economic crisis with a series of high-profile hearings by the Commons Treasury Committee.

The Prime Minister’s former adviser Sir James Crosby was forced to step down as deputy chairman of the Financial Services Authority amid controversy over his part in the collapse of HBOS when he was the bank’s chief executive.

Mr Bown launched a booklet aimed specifically at West Midlands families and employers setting out the help available to them.

It included details of assistance available for the public, including subsidies for mortgage income payments and a mortgage rescuse scheme, in which a housing associations buy a share in homes which are in danger of being reposessed by banks.

It also highlighted help for businesses including the government’s Working Capital Scheme which guarantees credit for firms with turnovers of up to £500 million a year, making it possible for them to obtain loans.