SHAREHOLDERS have claimed victory after drugs giant GlaxoSmithKline shelved an astonishing £11.5m pay deal for its chief executive.

But Glaxo, which employs around 1,500 people at its Barnard Castle site, said it remained committed to aligning boss Jean-Pierre Garnier's pay with his peers but wanted more time to "consider the way forward".

The Frenchman will as a result likely have to make do with a similar awards package to last year's £3.5m in 2002.

The National Association of Pension Funds hailed the move as a victory for common sense and praised Glaxo for listening to shareholders.

A spokesman said: "We are happy they consulted in the first place and that they have listened but we still need to see what happens in the future.

"Shareholders are going to be concerned about a chief executive getting such a big reward when the shares have gone down 40 per cent in the past year."

Glaxo chairman Sir Christopher Hogg spent last week on a whistle stop tour of the group's major investors to discuss the proposed pay deal.

It is believed this year's package, including salary and bonuses, was £11.5m but reports at the weekend suggested it may have been £21m.

A Glaxo spokeswoman refused to clarify the proposed terms but said the 2002 deal would now be set "at a similar level to last year".

She added that 54-year-old Mr Garnier would be sticking with the business despite the move. "He is committed to staying at the company," she said.