The German government has backtracked on plans to introduce legislation forcing top managers in Germany's largest listed companies to publish their pay.
Mr Gerhard Schröder, chancellor, and Mr Franz Muntefering, chairman of the ruling Social Democratic party (SPD), have decided to reject demands from SPD and Green party parliamentarians for such a law.
The decision will reduce the political pressure on top German executives to lay open their compensation packages. It marks the latest gesture of appeasement by Mr Schröder towards the country's business community.
The justice ministry had given itself until mid-2005 - after the publication of annual reports - to decide whether legislation was required to force executive directors of listed companies to publish their pay packages.
The decision by Volkswagen, the carmaker, on Monday, to release full pay details for individual board members from 2005 is understood to have played a central role in Mr Schröder's change of mind.
The thinking in the chancellery and in the justice ministry is that the move could persuade other carmakers to follow suit and add pressure on other large companies to do so.
