Proposals to slash the benefits of company directors are expected to be softened this week, after a government-commissioned review addressed criticisms made to its original findings. 

Major UK food companies such as Cadbury Schweppes reeled from the proposals made by the review's steering group last November to curtail the length of directorship contracts to one-year contracts and impose upper limits on the amounts given in severance packages. Many argued that it was necessary to retain the flexibility to offer longer contracts and higher severance pay if they to be able to attract and retain the best directors from overseas.

Investor groups similarly argued that the terms of employment for a director should be left to the discretion of the company.

Professor John Parkinson, from the steering group, commented: "There was some concern expressed that we were imposing rules that would be unduly rigid.

"We have taken on board the criticisms made [and decided on a] mild relaxation of the proposals," he added.

He stressed that the group still sought to reduce the privileges of directors, who often enjoy considerably better terms of employment than other staff members.

The final version of the review is due to be submitted to government ministers within the next week.