Bosses of a troubled steel company are gearing up to pay themselves massive bonuses while thousands of workers face the fear of redundancy.

Corus is on the brink of making swingeing job cuts in its UK operations after running up debts of £1.4bn.

But the firm's management hierarchy has re-engineered a bonus scheme which could now see senior executives collecting an extra £147,000 to £330,000 a year, depending on their salaries.

The news was last night greeted with anger and disbelief by workers, union leaders and politicians.

Michael Leahy, general secretary of the Iron and Steel Trades Confederation (ISTC), accused the company of playing an "April Fool's joke" at the expense of Corus employees.

Directors of the Anglo-Dutch steel company earn between £320,000 and £550,000 basic salary a year.

Chairman Sir Brian Moffat, a part-time post, picked up £245,000 last year and will add to his salary for taking over as acting chief executive following Tony Pedder's departure from the helm of the company after revealing annual losses of £458m.

But the board of directors' inability to run the company in profit stopped them cashing in on a lucrative incentive scheme which allowed for performance bonuses of up to 50 per cent of salary.

The scheme, introduced in 2000, has thus far failed to pay a single bonus to executive directors since its inception - a reflection of Corus's performance since the company was formed out of the merger of British Steel and Hoogovens.

The company's remuneration committee has proposed an overhaul of the incentive scheme, making it easier for senior bosses to top up their pay with bonuses of up to 60 per cent of salaries.

Bonus payments will be paid out depending on executives achieving set operating targets, rather than the previous benchmark of making sure the company ran in profit.

Mr Leahy said: "At a time when Corus has lost its chief executive, has recorded another loss, warned of capacity and plant reductions and staff morale is at an all time low what type of example is this to set?

"Corus employees have no problem with people being rewarded for success, but it appears that the remuneration committee has decided to insulate the directors from failure."

The ISTC is urging Corus shareholders to reject the new bonus scheme at the company's annual meeting later this month.

Workers at Teesside and Hartlepool, where Corus employs 3,600, were bewildered by yesterday's announcement.

One 36-year-old, a father-of-two said: "I am absolutely gobsmacked. We are worried sick about whether we will have a job to pay for our homes and to feed our families."

Coun David Walsh, leader of Redcar and Cleveland Borough Council, said: "I think this news will cause a lot of anger among rank-and-file steel workers on Teesside, many of whom feel they have more chance of getting a giro than a gratuity."

Ashok Kumar, who once worked for British Steel, called for an explanation from the board. The Middlesbrough South and East Cleveland MP said: "This seems an incredibly non-transparent system. It does not say how this is to be tied in to any improvements in the company's operating profits and any gains in efficiency.

"I think the board has got to come clean and explain how the system will work and how fair it will be.

"We would also want to know, does this mean there will be rewards for getting rid of staff?"

A Corus spokeswoman last night defended the revised incentive scheme, saying the targets would be "demanding and suitably stretching".

She added that an element of the bonuses would still be dependent on profitability.

A statement from the company said: "Incentive-based awards can only be earned through the achievement of demanding performance conditions consistent with the interests of the shareholders in the short, medium and longer term.

"In the current climate the remuneration committee of the board feels a more realistic scheme is required."