US Treasury officials are seeking to reduce the exit package paid to Rick Wagoner, the former chief executive of General Motors, who was ousted from his job by the Obama administration four months ago.

Mr Wagoner remains on GM's payroll making $1 a year and receiving the same benefits afforded to him during his tenure as chief executive.

He is to be cut loose "very soon" and given an exit package that will be made public, an Obama administration official said yesterday.

Mr Wagoner could be eligible for pensions that were worth around $20 million at the end of 2008, according to regulatory filings. Before standing down his base salary was $2.2 million, although he voluntarily reduced it by 50 per cent in 2006 and 25 per cent in 2007. He restored it to its proper level some months into 2008.

A spokesman for GM said: "I think that what they [Treasury officials] are trying to do is to reduce the exit package."

Pay and benefit packages for executives in post-bankruptcy GM are still being worked out by the Treasury Department and will not be finalised until after the company exits Chapter 11. GM and the Treasury will want to avoid any controversy surrounding Mr Wagoner's package.

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