The Minister for Finance has said the approach to bankers' remuneration will have to be re-examined.

Michael Noonan was referring to the pay package of €3m to AIB's former managing director Colm Doherty, who stepped down last November as a condition of the State's second bailout of the bank.

Speaking as he arrived at Government Buildings, Mr Noonan said the payment dated back to the time of the last government.

Addressing the Dáil, Taoiseach Enda Kenny said he was absolutely appalled at the latest 'banker payment scandal'.

The payment was described as 'inappropriate' by Minister for Agriculture Simon Coveney.

The Irish Times reports that Mr Doherty received the payments under a contract agreed when he was promoted in November 2009 to the role of managing director, replacing chief executive Eugene Sheehy.

The newspaper says details of the payments to Mr Doherty must appear in AIB's 2010 annual report, which is expected to be published shortly.

Mr Doherty's pay was made up of a salary, from January to November, of €432,000.

In place of a year's notice, he was paid €707,000, when his contract was terminated at the direction of former Minister for Finance Brian Lenihan.

He was also paid about €2m instead of a contribution to his pension.

The Department of Finance said it did not sign off on this payment, but that the package was what Mr Doherty was legally entitled to under the terms of his contract.

His appointment to the position of managing director in 2009 was controversial, as it went against the former government's commitment to change at senior executive level at the banks.

Mr Doherty had been on the board of the bank since 2003 and a director at a time when the bank made bad lending decisions.

AIB said it will not be commenting on executive pay in advance of the publication of the group's annual report.

Irish Bank Officials' Association General Secretary Larry Broderick has said his members cannot understand how the board of AIB and its public interest directors could have agreed the €3m package.

Mr Broderick said the package had been approved at a time when AIB was predicted to make substantial losses in the billions and thousands of job losses were forecast.

He said the bank had engaged in 'doublethink' by arguing that it was obliged to comply with Mr Doherty's contract, while breaking contracts with lower grades of bank staff in the public interest.