AN ILL-TEMPERED row between the German government and the head of Deutsche Bank overshadowed the launch yesterday of Berlin's €500 billion bank guarantee package.

German finance minister Peer Steinbrück demanded an explanation from Deutsche Bank chief executive Josef Ackermann after he reportedly said he would be "ashamed" to accept the state assistance.

"I would find it desirable if Mr Ackermann would make very clear, publicly, that he belongs to the supporters of this construction on which he had a considerable influence," said Mr Steinbrück in Berlin.

A government spokesman said the chancellor, Angela Merkel, was "very critical" of the remarks, which were described as "extremely alarming". Officials were annoyed that the remarks would cast doubt on the merits of the plan just as it went to work.

After several government bail-outs of banks, the Deutsche Bank manager was one of the first to call publicly for a "systematic solution" to the situation in Germany.

Mr Ackermann's alleged remarks to fellow bankers appeared at odds with weekend remarks to the Bild am Sonntagnewspaper, in which he said banks should take aid if necessary and not reject the plan for reasons of "pride" or "prestige".

A spokesman for the bank said the "ashamed" remark, published in Der Spiegelmagazine yesterday, was a rumour.

Meanwhile, after promising to make banks "hurt" in exchange for a state guarantee, the cabinet backed away from plans to limit to €500,000 annually the salaries of managers at banks receiving state aid.

What was used as a selling point for the package to a sceptical public was dropped after advice that interfering in contracts between banks and their managers could open a legal can of worms.