Confirming Sky News' revelations on Friday morning, NatWest said in a statement to the London Stock Exchange that Dame Alison would still receive payments totalling in the region of £3.2m prior to the end of her 12-month notice period.

Dame Alison stepped down in late July after admitting she had discussed the former UKIP leader's banking arrangements with a BBC journalist.

This week, the Information Commissioner's Office was forced to make a grovelling apology to Dame Alison after it claimed she had broken privacy laws - which prompted a furious response from Mr Farage.

It emerged following a subject access request by Mr Farage that NatWest employees had belittled the broadcaster and former politician, making a stream of pejorative comments about his views and finances.

Last month, the bank apologised to Mr Farage, acknowledging that it had been guilty of "serious failings" in the way it had treated him.

The decision to "debank" Mr Farage sparked a firestorm in Westminster and forced the City watchdog into an urgent review of the practice across Britain's banking sector.

In its statement on Friday, NatWest said Dame Alison would forfeit unvested share awards worth £4.7m at Thursday's closing share price.

She would also relinquish variable pay for her work in 2023 which could have been worth up to £2.9m, meaning the overall pay award she will forego amounts to £7.6m.

NatWest said its former boss would receive £1.75m in base salary, fixed share award and pension entitlements between now and next July, adding to around £650,000 she has received since her exit.

In addition to that £2.4m, a share award which is worth at NatWest's current stock price around £800,000 will vest during Dame Alison's notice period next spring.

The bank said "no finding of misconduct" had been made against Dame Alison.

Responding, Dame Alison said: "I am pleased that NatWest Group has confirmed that no findings of misconduct have been made against me."

"I can also confirm acceptance of the terms of the settlement agreement, which is in line with NatWest Group's remuneration policy, bringing the matter to a close."

Mr Farage said the move by NatWest to cancel the bulk of her potential payout was "correct".

"It is right for the taxpayers and nobody should be rewarded for failure," he said in a video published on X, formerly Twitter.