Patricia Hewitt said shareholder pay revolts were "justified"

The UK government is planning a crackdown on huge pay-offs for well-paid bosses of ailing companies.

A spokeswoman for the Department of Trade and Industry told BBC News Online that the department is currently looking into the issue of executive pay.

"We will issue a consultation document in due course," she said.

On Sunday, The Observer newspaper reported the Department of Trade and Industry's plans to curb excessive executive pay deals would involve cutting the length of company director contracts from a year to six months.

The newspaper further said Trade and Industry secretary Patricia Hewitt planned to link bosses' pay-offs to their performance at the company.

"Justified fury"

In order to stop company directors from cashing in huge amounts of money before going to another job, the Department is reportedly also proposing to pay out compensation to directors in stages.

The Department's spokeswoman refused to comment on the details of the plans.

But in a speech on Friday, Patricia Hewitt described recent shareholder pay revolts as "entirely justified fury."

The Department's plans come amid one of the stormiest seasons of shareholders' meetings in years.

Last Thursday, company directors at Barclays and Abbey National Bank were faced with angry shareholders questioning the huge sums they were paid.

Fat cat excess

Shareholders are particularly angry about massive pay-offs for bosses who leave struggling companies.

For example, Adam Singer of Telewest, Ken Berry of EMI and John Mayo of Marconi all cashed in millions of pounds after leaving their deeply troubled companies.

On Sunday, the Welsh Secretary Peter Hain described the pay-offs awarded to boardroom executives as "obscene".

He said the big test for Labour at the next election would be the difference the party had made to the most needy in society.

"We have to be able to really show at the end of our terms in office that we have made a substantial, measurable and clear difference to the bottom group in society," he said.