RBS chairman Sir Tom McKillop launched a passionate defence of his position after being accused of not having the qualifications to do the job.

And the bank also defended the salaries and bonuses being paid to its top executives despite the plummeting share price and its plea to shareholders for £12 billion of extra funds.

The Edinburgh-based bank's 18-man board faced more than 300 shareholders at its annual general meeting in the Edinburgh International Conference Centre yesterday.

After coming through a difficult afternoon, chief executive Sir Fred Goodwin received a boost today when former RBS chairman Sir George Mathewson said he should not be ousted from his role.

Sir George, who together with Sir Fred pulled off the RBS takeover of NatWest in 2000, said: "This is not the day for throwing out the baby with the bathwater." He said it would be "fanciful" to try to find a new chief executive while the bank has a lot of work to do to integrate Dutch bank ABN Amro.

His comments followed a fiery question and answer session yesterday as shareholders voiced their concerns over the current running of the company.

Musselburgh-based private shareholder Fred Lawson said Northern Rock had been brought down by a chairman and chief executive with "no qualifications or knowledge in banking". Addressing Sir Tom, he said: "I see that your background is as a pharmacist and I am sure that you are an excellent pharmacist but I find you a little like PC Plod rearranging the deck chairs on the Titanic."

But Sir Tom said: "I don't want to be overly defensive but I am not a pharmacist. My background is in mathematics and science and I worked 40 years in industry.

"I've been involved as a CEO for various positions for 14 years and involved in many, many major transactions and I have been almost ten years on the boards of banks. So, with humility, I would suggest I do know a bit about it."

The announcement on Tuesday by RBS that it was to launch what is thought to be Britain's biggest ever rights issue was always expected to make yesterday's AGM a stormy affair.

Despite the concerns, Sir Fred, who received a £2.9 million bonus as part of his £4.2m salary last year, only spoke once during the meeting, which lasted well over two hours, and even then only when a shareholder insisted that he answer instead of Sir Tom.

Among the disgruntled private shareholders was John Stein, who said: "You guys are paid as though you are superhuman and it is very clear you are not."

Bob Scott, RBS's senior independent director with a responsibility for remuneration, replied:

"If we want to attract top-class executives then we have to be coming up with a remuneration system that is there or thereabouts against the comparative groups."

Following the meeting, the bank's share price continued its decline today, falling 9.5p in early morning trade to 335p.