The decision to give the acting chief executive of Northern Ireland Water a £20,000 pay hike has been criticised as “an insult to low and middle income public sector workers”.

Regional Development Minister Danny Kennedy revealed he has agreed to increase Trevor Haslett’s pay after he threatened to resign earlier this month.

Mr Haslett was appointed after the previous chief executive, Laurence MacKenzie, resigned in the midst of the Christmas water chaos last year.

The Ulster Unionist minister has permitted Mr Haslett’s pay rise from £130,000 to £150,000, but only if NI Water performs satisfactorily over the winter.

However, SDLP regional development spokesman Joe Byrne criticised the minister’s decision.

“This exorbitant pay rise is a slap in the face to the thousands of low-paid public sector workers who are having their wages frozen and their pensions cut,” he said.

“At this time of financial austerity it seems unjustifiable to grant such a large pay increase to someone who is already receiving a handsome salary.”

Mr Byrne said the public needs to know what benchmarking, if any, has been used to determine Mr Haslett’s new salary level and what improvement performance criteria have been put in place “to warrant such a hefty salary increase”.

A spokeswoman for the Department for Regional Development confirmed the deal. “Northern Ireland Water needs leadership and stability,” she said.

“Trevor Haslett has demonstrated that he is the best person to lead NI Water through the winter.

“The package proposed by the board of NI Water has been approved but will not be paid until after the winter. A significant element is subject to a satisfactory performance over the winter.”

News had leaked out that Mr Haslett was considering his position because he wanted more security of tenure with a two-year contract and a £20,000 pay rise.

Mr Kennedy said at the time that he would not be “stampeded” into making a decision, but would consult with his ministerial colleagues.

Mr Haslett was formerly head of engineering with NI Water and was previously a director of a private civil engineering company.

Mr MacKenzie drew criticism for his level of pay at £250,000 and was also severely criticised for the company’s performance during last year’s big freeze and subsequent thaw.