It wasn't meant to be the idea that a Labour government would create "Fat Cats".

Indeed, the party got to power partly on the strength of decrying those in the nation's boardrooms whom it felt had thrust, as its spin-doctors put it to various tabloid journalists, "their snouts in the trough" with excessive alacrity.

Stephen Evans

Accordingly, ministers are now poring over the small print of a dull but important clause in its Fairness at Work measure.

They made their proposals without realising that one of the more obscure clauses raised the possibility of big pay-outs to sacked company directors.

At the time, all the political attention was on the parts of the measure which affected union recognition.

But buried in the detail was a proposal to abolish the ceiling on pay-outs awarded by tribunals to people who had been unfairly sacked.

At the moment, there is a maximum of £12,000 that an employer can be ordered to pay if it gets rid of someone unfairly.

Under the proposals, the sky would be the limit.

It would be like the situation where an employer is found guilty of sex or race discrimination.

In these cases, tribunals award hundreds of thousands of pounds to people who have been wronged.

The calculation is based on earnings lost to the person who has been discriminated against, and clearly if a person loses a high paid job the foregone earnings over the rest of his or her career will also be high.

The worry for ministers now - with the worries fed by the CBI - is that incompetent directors would be able to win large settlements from their companies.

They would be able to say to their disgruntled employer: "Look, you want to get rid of me but if you sack me and I go to a tribunal I could win hundreds of thousands of pounds. Let's do a deal for a little less".

And "a little less" could still be a large figure.

Mandelson mulls clause

For this reason, the Trade and Industry Secretary, Peter Mandelson, is likely to re-insert a ceiling when the proposals he inherited from his predecessor at the DTI get published in the White Paper.

It seems likely it will be put back but at a higher figure of perhaps £50,000.

Union recognition

Mr Mandelson is also under pressure to water down another part of the proposals which came from Margaret Beckett when she was the Secretary of State for Trade and Industry (or President of the Board of Trade, as she - unlike Mr Mandelson - liked to style herself).

Mrs Beckett decided that employers would have to deal with unions where at least 50% of the workforce were actually members or where 40% of the workers voted to be represented by a union.

There are signs that Mr Mandelson wants to toughen the rules - perhaps by insisting that people should have been members of a union for, say, a year before they could be counted - making the hurdle much higher.

Unions say that such a proposal would lead employers to sack union members just before they completed a year's service.

It may be that the proposal comes to nothing - it may be that kites are being flown which will never see the light of day in the White Paper.

What is clear is that what seemed like a done deal when the proposals were published two months ago is suddenly up for negotiation again.

At the end of it, there will be a battle in cabinet.

Employers will win some concessions on compensation to sacked employees.