"I've lost trust in the chief non-executive director of BAMC because he has been misleading me with his information and because events were not as he presented them and back pay has been concealed," Mramor told reporters in Ljubljana on Friday.

After the government adopted new guidelines to cut executive pay at the bad bank in March, Mramor ordered for the contracts to be changed accordingly and was assured this had been settled.

However, on his first checking Mramor found the contracts were not fully aligned with the new pay policy, despite assurances by BAMC the issue had been tackled by means of addenda.

The minister demanded twice more for the basic contracts to be brought in line, but after they were still not signed in accordance with the new pay policy he intervened again and got the same assurances.

Eventually Mramor requested data from BAMC, and on its examination found the payments were not in compliance. This is why he will now demand Nyberg be sacked being that as chairman he is responsible for the contracts.

"The management board of BAMC has been notified of the decision. Procedures in such cases are clear, it is up to the general assembly to take a position on the minister's proposal," BAMC said in reaction.

In a release BAMC also said that the Finance Ministry had been kept up to date on all remunerations of executive and non-executive directors. BAMC officials will make further comments on Monday.

Meanwhile, the three non-executive directors appointed by the government in March - Marko Simoneti, Imre Balogh and Janez Širovnik - remain on the management board.

"The board will for now have three members who will pick chairman amongst themselves," Mramor said, adding a proposal for the appointment of a new non-executive director would be submitted to the government as soon as possible.

Under the contracts he had seen Mramor said that non-executive directors were not entitled to a payoff.

"This is a relevant issue though as the right to the golden handshake was envisaged in the original contracts, although the pay policy valid then didn't provide them. This is why I had demanded adjustment before March, which was implemented."

The government has in the meantime drawn up changes to the measures to boost bank stability act, which is now in parliamentary procedure and which also deals with BAMC.

BAMC and the Sovereign Holding are not in the public sector pay system, nor they are subject to executive pay restrictions for state-owned companies under the act sponsored by former Economy Minister Matej Lahovnik.

"Special rules apply to them which the government determines through a pay policy and they are remaining such now. But a motion is being in adjustment in parliament and we shall discuss that," Mramor said.

Nyberg told reporters on Thursday that pay of BAMC management members had throughout been in compliance with existing policies and contracts.

With the new pay policy in force in March, CEO Torbjörn Mansson's pay was cut, but he had been paid back bonuses, he said, adding that since the enforcement of the new pay policy no director received bonuses.

The issue of excessive executive pay at the bad bank was brought up after the Court of Audit found remedy measures demanded in its audit of BAMC had not been implemented satisfactorily.

The matter will be discussed by the relevant working parliamentary bodies next week, to be followed by an emergency plenary session.