The government has finally signalled its determination to crack down on "fat cat" pay deals in the private sector.

New regulations aimed at curbing excess boardroom pay have been announced by Trade Secretary Patricia Hewitt.

Employers as well as shareholders should be given a say in determining directors' pay

TUC

Under the plans, which will take effect at the end of this session of Parliament, shareholders will have the right to vote annually on the level of directors' salaries, and companies will have to publish details of how salaries relate to performance.

Trade Secretary Patricia Hewitt said: "Top-class pay for the best performers is something we support.

Patricia Hewitt: Top class pay is something we support

"But there can be little doubt that some company directors have received lavish pay awards in circumstances when they aren't deserved.

"These regulations will mean that all quoted companies .. will have to justify how salaries are linked to performance."

But the four-year delay in implementing the proposals will raise eyebrows among unions and other activists.

Long delay

The clampdown on directors' pay has long been an objective of the trade union movement, but the government moved extremely slowly in its first term in office despite first raising the issue in 1999.

The current proposals were first published in October 2001.

Since those proposals were published, several surveys have shown that boardroom pay has risen much faster than that of ordinary workers, spurred on by the increasing use of share options.

The TUC welcomed the move "which would bring some more transparency to the way directors' pay is set".

But a TUC spokesman told BBC News Online that the proposals did not go far enough and "employers as well as shareholders should be given a say in determining directors' pay".

Employers' organisations have generally argued against compulsory measures, believing that self-regulation by City investors would see off the worst offences.

But the recent scandals in the United States, where Enron executives pocketed huge bonuses just before the company collapsed, may have made the case for statutory action more urgent.