State-rescued Royal Bank of Scotland on Thursday said its net losses widened to almost £2.0 billion in 2011, hit by the Greek debt crisis and compensation costs linked to insurance mis-selling.

RBS, 82-percent owned by the British government after a massive bailout in the wake of the financial crisis, unveiled losses after tax of £1.99 billion (2.35 billion euros, $3.12 billion) for 2011, up from £1.12 billion in 2010.

Pre-tax losses surged 92 percent, RBS added in an official earnings statement.

"After the effect of several large one-off items such as ... compensation costs, Greek sovereign debt impairments, and integration and restructuring costs, the group reported a pre-tax loss of £766 million," the bank said.

RBS paid staff a total bonus pot of £785 million, down 43 percent compared with 2010. This included £390 million for its 17,000 investment banking staff, down 58 percent.

Ahead of the results, the bank's chief executive Stephen Hester bowed to public anger and waived his annual bonus of shares worth £963,000 on top of his £1.2 million salary.

The large bonus, coming amid ongoing government austerity and economic gloom, had sparked outrage among trade unions and opposition politicians because RBS is almost fully nationalised following its rescue.

And in January, the former chief executive of the Royal Bank of Scotland, Fred Goodwin, had his knighthood stripped by Queen Elizabeth II over his role in the bank's near-collapse in 2008.

RBS has also been hit by having to pay compensation totalling hundreds of millions of pounds to customers who were mis-sold insurance policies by the bank.

In April 2011, British banks lost a high court appeal against tighter regulation of PPI, which provides insurance for consumers should they fail to meet repayments on a credit product such as loans, mortgages or payment cards.

PPI became controversial after it was revealed that numerous consumers had been sold the insurance without understanding that the cost was being added to their loan repayments. Britain has since banned simultaneous sales of PPI and credit products.

Since 2008, the British state has injected £45.5 billion of state money into RBS.

Goodwin came to symbolise the financial crisis in Britain after he oversaw the disastrous multi-billion-pound deal to buy Dutch rival ABN Amro at the height of the crisis in 2007.