NORTHERN Rock is to face a Parliamentary inquiry over generous cash bonuses paid to thousands of staff after a senior Treasury figure condemned them as outrageous, The Northern Echo can reveal.

Michael Fallon, deputy chairman of the powerful Treasury Select Committee, slammed the ten per cent payments made to bank staff in reward for hitting targets on repaying the company’s £26bn Government loan.

The former Conservative MP for Darlington said the suggestion senior managers may be in line for bonuses of up to 30 per cent was “outrageous”.

Mr Fallon vowed to press for an investigation by the committee into any payments made by the nationalised lender.

He said management, in particular, should not be entitled to receive payments and should decline such bonuses out of self respect.

His comments came after Lord Turner, chairman of City watchdog the Financial Services Authority (FSA), defended the bonus payments, saying they were of only “modest sums of money”.

Speaking to The Northern Echo last night, Mr Fallon – who tore into Northern Rock executives when they appeared before the committee in October 2007, accusing them of “clinging to office” – said: “This whole issue is scandalous. This is public money and staff should not be rewarded with it.

“The suggestion that management – these people responsible for bringing this great bank to disaster – may receive bonus payments is outrageous. Any senior Northern Rock manager with any self respect would not accept such a bonus.

“I am sure the Treasury committee will be keen to investigate this matter. This will be something I will be looking into.”

Northern Rock’s 4,000 staff are to receive their ten per cent bonuses today after the bank hit its target of repaying a quarter of its loan by December 31.

In total, the bonus payments are thought to be worth £8.8m, under a scheme drawn up with the company’s business plan last March.

Payments to senior management are also to be made, with the amount determined by a remuneration committee.

Last night it emerged that senior managers may have to wait months to learn if they will receive big payouts.

Executives, who are believed to have recommended themselves top-ups of up to 30 per cent of their salaries, will be paid only if Chancellor Alistair Darling gives his approval.

That decision will be made when the Rock’s overall business plan is approved or rejected, a verdict delayed by this week’s U-turn that will allow the nationalised lender to start expanding again.

The issue of bonus payments by the bank – which axed 1,300 jobs last year – has sparked widespread fury from politicians, taxpayers’ groups, trade unions and Northern Rock shareholders, with critics describing it as an “indefensible”

abuse of taxpayers’ cash.

It has also been criticised as flying in the face of Gordon Brown’s pledge to clamp down on banking bonuses.

But yesterday, Lord Turner, of the FSA, which faced criticism after the Rock sparked the first run on a UK bank for 150 years, defended it, sparking more criticism.

He said: “Those people were given a promise and it is important to realise that these are not fat-cat bonuses of millions, these are ordinary workers who have done the job that they have been told to do, which was the job people thought was the sensible thing at the time.”

His comments met with more anger from Mr Fallon, who now represents Sevenoaks, and has been an outspoken critic of how the Rock collapse was handled.

He said: “Whatever Lord Turner says, this is still public money. It is highly insensitive and quite wrong at a time when people are being made redundant across the country.”

Mark Wallace, campaigns manager for the Taxpayers’ Alliance, said: “An awful lot of money has already been spent in helping Northern Rock keep these jobs. Hundreds of thousands of people are losing jobs, and many more are worried about losing their jobs, so having a job is a bonus.”