Commons leader Harriet Harman is set to launch an inquiry into whether bonuses paid by City firms discriminated against women.

In a speech at the Labour regional conference in Sheffield, Ms Harman will say that the annual reward system in the financial services sector is a “licence for unfairness and discrimination” and will call on the Equality Commission to investigate the practice.

She is also expected to highlight figures showing that men were paid bonuses of up to 40 per cent more than women even though 50 per cent of employees in the City are women.

Ms Harman will tell those attending the conference: “We don’t have to choose between a strong economy and fairness – we must have both. And that includes fairness in the financial services sector.

“There is something rotten in the remuneration system of the banks and finance companies. Men paying themselves millions of pounds of bonuses each – and then saying that they didn’t know what was going on.”

This week, the papers reported that banks, that had received taxpayer bailouts, were rushing to make bonus payments to staff ahead of regulations to clamp down on bonuses.

The business secretary has urged banks to take into account the prevailing economic conditions and to consider how the payment of bonuses would be viewed by the public.

US president Barack Obama has already called for a salary cap of $500,000 (£346,450) for top officials at US banks that required help from the state.