The council’s latest set of accounts show how the council’s wage bill has ballooned in the past year.

A total of 555 (including 329 teachers) earned more than £50,000 in 2009/10 – up from 482 in the previous year.

The local authority is currently searching for a new chief executive but Cllr Anderson has made clear the same level of pay will not be offered to the new recruit.

Liverpool Direct Limited boss David McElhinney, who has taken on a chief executive type-role, will be paid a pro-rata rate of £168,000.

Cllr Flo Clucas, deputy leader of the Liberal Democrat opposition, said: “I think it is right that people on high pay who receive a good salary in these current times should not have performance related pay added on.”

She said her party had been moving this way while in power and had taken measures to start the phasing out of bonuses.

She said they had been justified in the past to attract top talent.

“At the time Liverpool was a basket case and it was needed to attract people.

“But we have turned around the image of the city.”

Jack Stopforth, chief executive of the Chamber of Commerce, said he believed the current special circumstances warranted the move.

“I think we could have an interesting debate about whether a culture of bonuses is good or bad for business, but in this situation it does not apply.

“There is an imperative to make short term savings.

“So this is understandable and every company in the area would sympathise with the council.”

Earlier this month the council introduced recruitment freeze to deal with grapples the ‘biggest financial crisis to hit the city for decades’.

Days later it emerged the council is facing an £11m blackhole in its social services budget.

Last year the city treasurer Robert Corbett said the council had a £120m gap in its budget over the next five years.