The Association of British Insurers (ABI) has upped the pressure on Marks & Spencer by signalling that it could oppose any pay off to Lord Burns, the retail giant’s outgoing chairman, according to The Times.

The influential investment body was already angry with the retailer over the senior management shake-up last week, in which M&S said that chief executive Sir Stuart Rose would also take up the role of chairman from June until 2011.

The reshuffle will involve Lord Burns stepping down as chairman at the end of May, with a potential pay-off of£450,000 – one year’s salary.

Yesterday, M&S said again that it was obliged to honour his contract. “He stepped down in the interests of the company,” an M&S spokeswoman said.

The ABI is believed to feel that such a pay-off suggests that there was not unanimous support in the M&S boardroom for Rose’s promotion.

The ABI head of investment affairs Peter Montagnon said: “There are elements of this possible pay-off that are particularly worrying. We will be checking the details.”

The ABI’s members control about 20 per cent of the shares in the City. Both Lord Burns and Sir David Michels – the non-executive poised to become M&S’s deputy chairman – are expected to meet disgruntled shareholders in the coming weeks.

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