THE man soon to be head of Scotland's biggest company knows that he's walking an unsteady tightrope and that the critics are lining up to knock him off. With the economy also close to falling over, it looks like Stephen Hester is in for a rocky time.

One tabloid last week attacked the Royal Bank of Scotland's new chief executive for hosting a lavish hunt ball at his £7m Oxfordshire home while 16,000 Scots employees were worrying about their jobs and taxpayers were pouring billions into keeping the bank in business.

That's the trouble with being married to the Master of the Foxhounds of the Warwickshire hunt. But as Hester says: "It's important for our marriage that I do the same as she does."

However, his opponents won't worry about his domestic arrangements if he doesn't do well by his new workforce and customers. With the bank raising up to £20bn from taxpayers and expected to trim its 170,000-strong payroll in a review of its global empire, Hester accepts that the job will be "unbelievably stressful" and that he'll be subject to some "unpleasant scrutiny".

Clearly, his background and lifestyle will create some division as he settles down to life north of the border. He was president of the Tory Reform Group at Oxford University and continues to support the Conservative party.

He's also a wealthy man, thanks to a long and successful career in investment banking with Credit Suisse First Boston that has provided three homes: a £5.8m mansion in London, a ski chalet in Switzerland and his 350-acre pile in Oxfordshire that has eight gardeners. It should provide plenty of ammunition for those who believe bankers to be pampered and overpaid.

Hester was known to be deeply unhappy about the attacks on his foxhunt ball, but he's ready to accept that life as a top FTSE-100 chief executive comes with that sort of scrutiny. These days, doubly so. He's aware of the current climate of resentment and has prepared himself for what is likely to be thrown at him.

So cutting to the quick, where does he stand on the bonus issue? "Every bank has to be very sensitive to the fact that business results are down and there is a strong climate of criticism on pay," he concedes. "The board will take no bonus for 2008 and if in 2009 they are thought appropriate they will be taken in shares."

The concession may defuse some more potential fireworks, though the bank was again in the firing line last week when it emerged some RBS executives had been on a junket to the Brazilian Grand Prix, even though the bank is entitled to attend as a sponsor.

If handling the public relations presents a tough enough assignment, Hester is under no illusions about the size of the task facing him at RBS. A career that has also embraced high office at Abbey National and most recently British Land, the second-biggest quoted property company in Britain, has arguably given him a better preparation than his predecessor.

Inevitably the two have been compared and contrasted. Goodwin liked his sports cars; Hester is passionate about trees. Both enjoy the good life, Goodwin preferring the Savoy and a personal valet, while Hester has his multiple homes and fondness for skiing. Like Goodwin, Hester will spend two days a week at Gogarburn but he will not be using the £17m Falcon 900EX private jet that flew Goodwin around the world. It will be a victim of the coming clampdown on costs.

One factor in his appointment is a combination of banking experience and achieving significant turnarounds. He considered British Land a "cultural challenge". While at Abbey, where he was finance director and then chief operating officer, he was said to have adopted a "slash and burn" approach to restructuring. Which will it be at RBS?

He opts for a diplomatic course, admitting there would be job losses; that there would be "no geographic bias" and that it was his job to look for efficiencies and play to the bank's strengths.

"We are in a position where we have to cut costs because a number of markets will have lower business volumes and we will need to make adjustments. But I have no idea what that will mean in terms of jobs at the moment."

Hester, 47, hesitates before answering, exercising a methodical mind before committing to something he may later regret. Former colleagues speak of his intellectual rigour and of a potential for ruthlessness that may rival that of his predecessor.

He is no stranger to Gogarburn or Goodwin, having met the former hero of Scottish banking on numerous visits to the RBS headquarters, as it is British Land's lead banker. They also met at various functions for FTSE-100 CEOs and RBS was a client of Hester's when he was at Credit Suisse.

He could not have imagined he would one day step into Goodwin's shoes, nor in such circumstances, and while there was considerable speculation that his appointment to the board as a non-executive was a stepping stone to the top job, Hester says he was not party to any such discussions. "I had no thought whatsoever that there was a vacancy or that I would be asked to do it," he says.

But events were to unfold rapidly. Two days after the Government rescue package was announced it became clear that there would be changes to the RBS board. "That Friday night I received a call from (chairman] Sir Tom McKillop asking if I would take the job. So during the day the nomination committee had decided what they wanted to do. Over the weekend there were intense negotiations with the Government and I had to decide whether I wanted the job. I said I would do it, but I wanted to satisfy myself that it would be a do-able job. I met ministers and Treasury officials on the Sunday and got a sense of where they were coming from. I signed the contract that night."

He says British Land acted "terrifically" in allowing him to leave within six weeks when the firm could have held on to him for a year. "In some respects this is what you train for in business. If you are in business you want to test yourself against the biggest and most complicated challenges.

"If you are a footballer you want to play in the Champions League final. It's the same in business. You want the best, and I am excited and full of vigour.

"On the other hand, jobs like this are unbelievably stressful, leaving you open to unpleasant scrutiny and there is a 50% chance it ends in tears because that is the way the world works. But, as they say, if you can't stand the heat get out of the kitchen."

The Scottish issue is one that may yet test him, given the political overtones to all big business decisions. Lloyds TSB boss Eric Daniels came a cropper over his slip-of-the-tongue remark on being "indifferent" to Scottish heritage, a comment he subsequently said was misinterpreted. Hester says he is unaware of the comment (some may argue he should not have been] but is clearly aware of Scottish sensitivities with so much now at stake. "I am very clear that an incredibly important part of the bank is its heritage and I want to make sure that on my watch those bonds remain strong.

"By the same token RBS is a global institution with many cultures and business challenges and we can only be successful if we attune ourselves to every market we are in."

Hester will arrive for his first day on November 25, by which time the strategic review of those global operations will be under way and the £15bn placing and open offer of new shares will be testing shareholder appetite. He will be talking to investors and hoping the markets turn benign so that there will be some take-up of the shares, which have hovered around the issue price.

He admits the restrictions on dividend payments will suppress any hunger for the shares and while he's unhappy at the Government's insistence on the repayment of £5bn of preference shares before any cash dividends can be paid, he accepts these are the rules of engagement.

The immediate future will be testing and the recovery, he reckons, will take three years. During that time it is unlikely RBS will be back on the acquisition trail that was both its making and its downfall. But Hester is trying to be optimistic about growth.

"The priority over the next two to three years will be to do a better job. We will need to shrink our balance sheet somehow and cut some costs. In so doing we may have to wind some businesses down, but hopefully we will improve some others. Only then can we be expansionist again."