The pay gap between directors and workers in British firms is wider than anywhere in Europe, according to a new report.

Top executives earn up to 94 times as much as their average employee, a statistic described as "staggering" by the TUC.

Research for the union organisation found that despite Government appeals for wage restraint, directors were awarding themselves bigger pay and perks rises.

Average salary for a chief executive in the biggest 500 firms was £413,000 in the 1997-98 financial year, 18 times more than the workers who earned an average of £22,400, said the report.

When long-term incentives were added, top executives earned 26 times more than workers.

The pay ratio between top executives and average workers in Sweden was just seven to one and in Germany eight to one.

The TUC said in evidence to a Government consultation on directors' pay that a "radical shake-up" was needed.

"The current system of remuneration committees made up of independent non-executive directors has become an old boys' network of back scratchers who each benefit from their comparative pay increases," said the report.

TUC general secretary John Monks said: "Such high levels of boardroom greed are helping to create a divided Britain. Those at the bottom of the pay scale are less likely to show restraint when those at the top are getting increasingly fatter pay packets."

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.