A move to ban quango bosses from receiving bonuses for the next two years failed at Holyrood during the week over fears that ministers could be taken to court.
There has been anger among MSPs at the refusal of the publicly-paid bosses to repay bonuses despite pleas from ministers.
Scottish Lib Dem finance spokesman Jeremy Purvis moved the ban as an amendment to the Public Services (Scotland) Reform Bill during its final legislative stage in the Scottish Parliament.
But the move was defeated by 63 votes to 17 when SNP and Tory MSPs joined to oppose it and Labour MSPs abstained, despite indicating earlier in the week that they would support the move.
If MSPs had agreed a ban it would have meant no bonus for the next two years for the heads of some of Scotland’s most high-profile public bodies.
Lena Wilson, the chief executive of Scottish Enterprise, receives an annual salary of £200,000 but also gets a 10% bonus.
Richard Ackroyd, the chief executive of Scottish Water, is paid £263,000 plus an annual bonus of 38%.
After the vote, a furious Mr Purvis accused the SNP and Tories of “choosing quango fat cats over the interests of the lower-paid.”
“When there is only a little money to go around it is even more important that it goes around fairly,” he said.
“The SNP government public sector pay policy of 1% will mean less than £150 a year to people on the lowest pay, but £600 a year to senior managers.Fairer deal”Meanwhile, Scottish quango chiefs are still pocketing tens of thousands of pounds in bonuses.
“The amendment would have meant a fairer deal for everyone.”
During a debate on the issue, finance secretary John Swinney made it clear the government was concerned a ban could lead to legal challenge.
“The problem is that this course of direction leads inevitably to legal jeopardy,” he said.
“It raises issues where we might be in contravention of the European Court of Human Rights, breach of contract law and the law on discrimination against individual employees.
“If you have the possibility of a court challenge you could be exposed to claims of compensation far greater than any gain made by banning bonuses.
“I have asked chief executives to waive their bonuses for 2010/11. This is the correct approach — not the Liberal Democrat approach.”
An earlier amendment to the bill from the Tories, which will mean that from next month all Scottish public spending over £25,000 will have to be declared, was passed after it won ministers’ backing.
Public bodies will also have to reveal how many workers have salaries of more than £150,000.
The public will have the right to see all spending on communications and special advisers, advertising and sponsorship, overseas travel costs and hospitality and entertainment payments.