The future of Deutsche Bank chief Josef Ackermann hangs in the balance after prosecutors appealed his acquittal on charges of approving illegal bonuses to board members to seal Vodafone's takeover of Mannesmann five years ago.

A state prosecutor said yesterday that Dr Ackermann and other board members were guilty of a "serious breach of the law" and a "serious breach of duty" during Mannesmann's takeover battle with Vodafone and the subsequent €154 billion buy-out.

In the middle of the takeover battle, the supervisory board, headed by Ackermann, approved a total of €57 million in bonuses for former chief executive Klaus Esser and other board members. Dr Ackermann did not receive any bonuses.

The state prosecutor is asking the Karlsruhe court to reverse the July 2004 ruling of Dusseldorf regional court that the executive board's violations of their duties were not serious enough to be considered criminal.

The court did rule one bonus illegal, to former board member Joachim Funk, but said the directors weren't aware at the time that this breached company law. The case attracted huge interest in Germany last year and prompted a public discussion about the justifications for high management pay.

The Dusseldorf judge ruled last year that the payments didn't endanger Mannesmann's profitability or continued existence, but that the action wasn't in the best interests of the company.

This may be considered a civil offence under Germany company law and this is the only issue that the federal supreme court in Karlsruhe will consider.

"We won't be giving any fundamental new answers to the question about if and at what level manager pay amounts to criminal breach of trust," said presiding judge Klaus Tolksdorf.

"One may have different opinions about whether such high payments are moral or justified. That can't be a criterion for whether a company has suffered economic damage."