There are 26 John Lewis department stores in operation

The �106m pot will be distributed among the partnership's 63,000 workers, and is up 21% on last year's payout.

Pre-tax profits rose to �216m ($415m), reflecting strong growth at supermarket chain Waitrose where sales rose 10%.

Despite tough conditions in the non-food sector its department store business showed a 1% rise in sales.

However, in the first five weeks of the new financial year sales were down 1% at the division.

Waitrose shines

Sales at Waitrose made a brighter start to the year, climbing 20% on the same period in 2004, the company said.

However, this growth reflected the acquisition of 19 shops from Morrisons which gave Waitrose food stores 20% more selling space. Like-for-like sales rose by 3%.

Ocado, the service that delivers food from Waitrose supermarkets, cut its losses last year, with the number of deliveries reaching 28,000 a week.

John Lewis said a further �81m would be invested in its pension scheme - up 13% on the previous year - which the company says is the only non-contributory final-salary pension scheme offered by a large UK retail employer.