After a storm of criticism Government is set to tell the House today it will defer plans to hike MPs pay by 30 percent – although a cost of living increase has not been ruled out.

Premier Ewart Brown Brown said a pay rise for Members of the Legislature would be "inappropriate and inconsistent", at this time.

Just a month ago Finance Minister Paula Cox revealed each Cabinet Minister had been told to cut their budgets by 10. 5 percent and Housing Minister David Burch has already announced a string of home building projects had been axed or deferred because of the downturn.

Dr. Brown said: "This Government is keenly aware of the economic challenges that confront the Island and we are determined to lead by example in prudent management of the economy and as a model of the sacrifices that we each should make to ensure that our successful economy continues to the benefit of all Bermudians."

A Government statement added: "The Government's decision means the proposed pay hike for Members of the Legislature outlined in the recent Parliamentary Pay Report is currently deferred save for the possibility of a cost of living increase."

MPs from the ruling Progressive Labour Party were said to be split on the issue but decided the economic downturn had made the large rise untenable.

One said: "We have deferred the whole report to an unspecified date.

"We discussed it at length but at the end came to this conclusion. Of course we are still of the view we should get a rise but the timing is bad."

This week union members complained they had fought tooth and nail for ordinary rises yet Government was about to vote itself huge pay hikes despite cutbacks across the public sector.

The pay package, proposed by an independent review board comprised of financial chiefs, had recommended basic salaries go up from $50,000 to $65,000.

It would have meant MPs' salaries had leapt by almost 65 percent since 2006, when they earned just under $40,000.

Cabinet Ministers would get $165,000 a year except for Finance Minister Paula Cox, who was due $135,000, and Premier Ewart Brown who was due $215,000.

The salaries review board was established in July 2005 and first reported in 2006. The law states the board must carry out pay reviews every two years.

For this pay review round the board has met 14 times, starting in February.

United Bermuda Party leader Kim Swan welcomed Government's decision to defer the big increase.

He said: "These are extraordinary times the Country finds itself in.

"We have said we can lead by example and this is a situation where both parties came to the right conclusion for the good of the Country."