THE chairman of North West Water defended his #325,000 annual salary

and a share option package worth several hundred thousand pounds before

MPs yesterday, dismissing Labour allegations of highway robbery as

misinformation.

Sir Desmond Pitcher clashed with the Committee's Labour chairman

Greville Janner over the use of share options to reward senior

executives of privatised utilities.

Asked repeatedly if he understood the public's concern over dramatic

pay increases for directors of the water and electricity companies, Sir

Desmond said the matter had been ''inflamed'' by politicians, and

refused to answer.

''I don't think the view which has been perpetrated widely is correct.

I get 22,000 letters per annum, 5000 personal ones, almost none are

concerned with share options,'' he said.

The public was being misinformed, and he blamed Labour and Shadow

Chancellor Gordon Brown, who on Monday released Labour's latest analysis

of executive pay packages in privatised utilities. ''The public are

concerned about the misconceptions being told,'' he added.

Labour claims 145 directors in companies ranging from British Telecom

to Scottish Hydro hold share options worth more than #100m. The figure

was calculated by multiplying the amount of shares held by their value

on Monday.

Sir Desmond angered Mr Janner by refusing to disclose the names of the

companies and organisations which received #60,000 in contributions from

North West last year, saying it was not relevant to the committee's

inquiry into executive pay.

Last year, Sir Desmond was paid #325,000, plus a #75,000

performance-related bonus. For that he worked full time as North West's

chairman, putting in a 50 to 70 hour week.

In addition, he received #1500 a month for the 45 hours a week he

serves as chairman of the Merseyside Development Corporation. However,

he said 45 hours did not equal a week's work and did not interfere with

his full-time commitment to North West.

On joining North West Water, he said, he took a 60% cut in

remuneration. He did not have a company car, a chauffeur, nor did he

receive gardener's services. North West Water does not offer its

directors an executive dining room.

His share option package, which allows him to buy a fixed number of

shares at a low price that he can then resell at the higher market

price, is based on 160,000 shares at 462p, and 54,000 shares at 393p.

Yesterday, North West Water's shares closed at 521p, giving Sir

Desmond a notional profit of almost #250,000. However, he said: ''We

would be disappointed with a director who exercised his options and took

the money. We would expect him to put the balance back into the

company.''

The confrontational tone continued through to the closing formalities.

When Sir Desmond said he ''enjoyed the meeting'', Mr Janner snapped

back: ''That wasn't what you were here for.''