UPDATE 2-UK body says "walking tightrope" on bank bonuses

* Says needs to reform bonuses but prevent staff exodus

* Expects healthy interest in UK bank assets

* Will consider remutualisation of Northern Rock

(Adds quotes, shares, details)

By Clara Ferreira-Marques and Steve Slater

LONDON, Nov 4 (Reuters) - The body holding Britain's stakes in bailed-out lenders Royal Bank of Scotland (RBS.L: Quote, Profile, Research) and Lloyds (LLOY.L: Quote, Profile, Research) said it was "walking a tightrope" in attempting to limit bonus payouts while trying to stop talented staff leaving.

The resurgence of "fat-cat" banker bonuses, despite the near-collapse of the political system last year, has grabbed headlines globally and enraged the voting public. But the head of UK Financial Investments (UKFI) said worries over pay should be weighed against the need to pull the banks back to profit.

"The public are understandably angry, bewildered about the payment of bonuses at the banks in which we are invested. On the other hand, as shareholders, we have a huge interest in holding these banks together," UKFI Chief Executive John Kingman told lawmakers at a hearing on Wednesday.

"We have to walk this tightrope in which we reform the cultures ... but we cannot afford to be in a position where the banks lose so many people that we start to lose serious value."