Mark Hughes: Luxurious retirement of a fugitive from the court of public opinion

He earned his nickname, The Shred, for his ruthlessness in cost cutting. But when it came to securing a sunkissed bolthole in which to wait out the public resentment at his sizeable pension, Sir Fred Goodwin spared no expense.

First he fled to Turkey, reportedly staying at the Dome Belek Kempinski, a remote five-star golf resort where rooms cost up to £1,700 per night.

And, after packing away his clubs, he moved on to his now full-time home in the South of France. Last Sunday's News of the World carried pictures of what it said was his home, a £4m villa with a swimming pool and tennis court, on a private estate. A source close to Sir Fred said: "That wasn't actually the right house. His house is nearby, but they got the wrong one."

Regardless, Sir Fred has undoubtedly been living luxuriously since quitting his £2m home in Edinburgh after it was attacked by a group protesting against the perceived corporate greed which led to the credit crunch.

The newspaper reported seeing his wife Joyce, who apparently likes to be known as Lady Goodwin, in a £500-a-day rented Mercedes and said she spent her days shopping and at a local health spa.

Their two children go to a school in France. But, contrary to reports yesterday, they have not, according to the source, been bullied by other pupils over their father's failings as a banker.

Sir Fred has the dubious honour of becoming the UK's first "celebrity banker" following the credit crunch. Paparazzi have hunted him but have so far yet to secure a surely lucrative snap of him living the high life.

The source said: "I don't know what kind of picture they think they are going to get. Perhaps they think they will catch him in a deck chair, smoking a cigar and saying 'What a lucky boy I am'."

The reality, according to a family friend, is much different. The report at the weekend said that Sir Fred had become a recluse while in France, rarely leaving the salubrious surrounds in which he now resides.

It is in contrast to his time at the bank when he enjoyed rubbing shoulders with the rich and powerful – he was a regular at Formula One races and visited Downing Street often to offer financial advice to the Government.

His friend told The Independent: "Since his home in Edinburgh was attacked it has been terrible for Fred. He has been very, very down and depressed and worried about his wife and children. It has been horrendous for them all."

He has refused to hire security. The family friend said: "He doesn't want security guards. He just wants people to leave him alone. He does not feel that he has ever done anything knowingly wrong. He accepts he made errors of judgement and that he has lost his career and reputation, but he feels that plenty of other bankers made similar mistakes and they have not been vilified in the way he has."

Meanwhile, RBS is attempting to recover from the legacy of excess created by its former boss. The first casualties? A £30m executive jet put on order by Sir Fred was cancelled, while its predecessor, also bought by Sir Fred, for £20m, was sold last month.