London, England (CNN) -- Bank of England Governor Mervyn King this week launched a scathing attack on Britain's banking sector, calling for a break-up of behemoth financial institutions that have taken billions of public money to stay afloat.
King says Britain's Main Street banks should be separated from their risky investment arms to dissolve a culture in which some banks can fall back on the knowledge that they are "too important to fail" and thus can keep gambling with vast amounts of public cash.
The governor's comments come as leading financial houses -- including recipients of taxpayer-funded bailouts -- prepare to pay out large bonuses, angering many who fear this signals a return to pre-economic crisis rewards for reckless profit-seeking.
King's demands have already been rejected by Prime Minister Gordon Brown, who said the problem needed global regulation, and treated with caution by financial analysts who say that while the governor is right to criticize, breaking up the banks is not the answer.
"He's 100 percent right to be worried but it's taken a year to bring any regulation into place," David Buik of BCG Partners told CNN.
"This is an inordinate length of time and the rest of the world is in cloud cuckoo land if they think they can agree regulation on a global basis. It simply can't happen."
Buik says that while King has done an "exemplary job" in steering the UK's central bank through the worst of the crisis, his plans for Main Street banking institutions is misguided.
"I am at loggerheads with him. I have to, with some humility, say that if he thinks investment banks can be split up from retail banks; I profoundly believe he's wrong.
"The fact remains, whether we like it or not, these banks need a large amount of capital to put their house in order, and retail banks without the attraction of a little bit of risk, controlled in the right way, will not attract capital in the same degree they will if they're on their own, and this will make life very much more difficult."
Instead, Buik says, the industry could be brought to heel using better housekeeping, larger capital, more transparency, better management and stronger regulations.
"We don't need to split them up. If we go the separation route I think the recovery of the world's economy will be postponed by somewhere between two and three years."
King's comments meanwhile have been welcomed by George Osborne, who will become financial minister if the opposition Conservative Party succeed in general elections expected early next year.
The Conservatives have already pledged to place banking sector regulation under the auspices of the Bank of England should they take office -- a move Buik says will result in little change for the banking titans of London's Canary Wharf.
"This will just mean three or four hundred people leaving Canary Wharf and hot-footing it down to the Bank of England. I don't think it's that much of a change, all it will mean is a management change.
Buik also defended the return of bonuses, insisting they are vital to economic recovery and were no longer represented by gargantuan cash hand outs aimed at rewarding short-term risk taking.
"I believe in essence the culture of bonus payments is changed. They will be paid over a three-year period, a third will be paid in cash no more and the rest will be in the form of share option schemes, some it clawed back if over the period of time if profitability is questioned.
"I think that goes an awful long way to change the culture despite the angst and anger that the general public feels about these bonuses.
"If you want the economy to recover fast, if you want the taxpayer to be repaid quickly then you must allow profits to be galvanized and delivered by the banks. And by doing that, one of those things, I'm afraid, is the bonus culture and incentives, and I believe it is a fundamental part of the recovery process."