(Rewrites first paragraph, adds detail, banking reaction, link to factbox)
LONDON, July 30 (Reuters) - Miscreant bankers face having their bonuses clawed back for up to seven years after their award under measures set out on Wednesday by the Bank of England, as it tightens its regulatory clampdown on wrongdoing in the financial sector.
The measures, some of the world's toughest on the financial sector, are the Bank's latest attempt to avoid a repeat of the multi-billion pound taxpayer bailouts of Royal Bank of Scotland and Lloyds which marked the peak of the financial crisis of 2008 and 2009 in Britain.
Despite the scale of the crisis, few bankers were subsequently punished for reckless behaviour and the sector's hefty bonuses remain a focus of public concern, given they have been blamed for encouraging the excessive risk-taking for rich short-term rewards which led to the financial sector meltdown.
The rule goes beyond the Bank of England's proposal in a consultation paper in March for a clawback of bonuses up to six years from the date they were fully paid out.
Lawyers say enforcing clawbacks is untested in the UK courts if a banker refuses to pay up, and there are also questions over what happens to tax paid on a recovered bonus. But some senior figures in the sector support the idea.
"The process of clawback can be extremely useful. We've applied it ourselves in cases where we've got things wrong," Antony Jenkins, chief executive of Barclays, said.
The Bank and the fellow regulator the Financial Conduct Authority (FCA) also proposed in a new consultation that senior managers face clawbacks of up to 10 years if they are being investigated.
"These proposals are tougher than the industry would have liked, but there was a general resignation that they would be implemented whatever the costs and technical difficulties and however far it puts the UK outside international norms," said Nicholas Stretch of law firm CMS.
The Association for Financial Markets in Europe (AFME), a banking lobby group, said it was concerned about the lack of coordination of clawback arrangements at a global level.
Britain's latest tightening of the screw on the financial industry comes as bad behaviour is still being uncovered, with leading banks already fined for manipulating benchmark interest rates and braced for further possible fines after allegations of rigging foreign currency rates.
Earlier this week Lloyds was fined $370 million for rigging benchmark lending rates.
The new seven-year clawback rule for all bankers will apply to bonuses made on or after Jan. 1, 2015 to all London-based staff of deposit-taking banks, EU banks and major non-EU banks such as Citi, Morgan Stanley, Goldman Sachs and Credit Suisse.
Bonuses are typically paid out over three to five years and can already be clawed back during this time, but the new rule allows the clawing back of an award after it has been received.
Other rules already introduced on bonuses include a European Union law limiting their value to twice the amount of fixed pay, subject to shareholder approval.
Britain has also already passed a law making reckless behaviour by bankers a criminal act punishable by up to seven years in prison and Wednesday's consultation spelled out which types of bank employees would be subject to this.
"We'll examine the detail of these new proposals with interest, but it is important that any new regulation does not put British banks at a disadvantage when it comes to attracting and retaining the best workers here and overseas," said Anthony Brown, chief executive of the British Bankers' Association.
Probes into some misconduct, such as rigging of market interest rates, take several years, meaning bankers involved may have already been paid bonuses covering the time the rule-breaking took place.
The Bank and the FCA also on Wednesday published plans to make top bankers directly accountable for their actions - known as the senior managers' regime - by signing a statement listing their specific responsibilities, making it easier for regulators to bring them to book if something goes wrong.
They also proposed a certification regime for any employee whose activities could potentially harm the bank or customers.
In addition, the two regulators proposed making bankers wait longer to receive all their bonus. Currently the non-cash part of bonus is paid over three to five years and the regulators want a longer time period of seven years for senior managers.
"These requirements will create the toughest deferral regime in the world," said Rob Moulton of law firm Ashurst.
The deferred portion of a bonus for senior managers would only start to be paid out after three years, or one year for more junior staff, the regulators also proposed.
"Today's consultations mark a fundamental change in the regulators' ability to hold individuals to account, which is what the public expects of us," FCA Chief Executive Martin Wheatley said in a statement.
(Editing by Matt Scuffham and David Holmes)