Sir George Young, the Financial Secretary to the Treasury, will this week table an amendment to the Finance Bill to prevent part-time bosses benefiting from the boom in top pay.
Embarrassed ministers realised last week that the Bill's implementation of a European Union directive giving part-time workers the same rights as full-time workers - including the granting of share options - could be used to line the pockets of company chiefs.
The new amendment will specifically exclude part-time directors from cashing in on the extension of rights to workers, closing a loophole that would otherwise have created fresh controversy for John Major. The pay of top executives has been this year's number one scandal.
The Prime Minister startled the Commons last week with his promise to consider legislation to curb the huge pay and share option packages that directors of privatised utilities are awarding themselves. This week's move, which reverses the effect of an earlier amendment put down by Jonathan Aitken, the Chief Secretary to the Treasury, is the first sign of his legislative intentions.
However, the Opposition was last night unimpressed by the Government's step back from giving share options to part-time directors. Shadow Treasury minister Andrew Smith MP said: "All they have done is go back on the extension of the share option scandal. However, it is a humiliating climbdown. The Government is clearly still in disarray."
Opposition City spokesman Alistair Darling MP added: "The Tories have been caught at it again. There must be a lot of red faces in the Treasury. At the same time as John Major was talking about legislation, his own ministers were proposing to make some directors even richer.
"We will support any measure that closes a loophole, but we will scrutinise it very carefully. With the Tories you have to read the small print very carefully."
John Major moved to quell public disquiet about "greed in the boardroom" last week after exploding in fury at the disclosure that the chairman of the privatised National Grid, David Jefferies, stands to make £2.14 million this year from pay and share options. This news followed the revelation in the Independent on Sunday that 77 directors and top executives of the privatised electricity companies of England and Wales have awarded themselves £72m in share options.Reuse content