One of Tony Blair's most senior lieutenants in the union movement has received a 37 per cent pay increase, giving a massive boost to her severance package.

The rise granted to the former Labour Party chair Margaret Wall - more than 11 times the inflation rate - means that her "golden goodbye'' from the Amicus trade union increased from about £105,000 to £135,000. The payment was based on her salary, which increased from £45,000 to £62,000. Her pension will rise by £10,000 a year. It is understood that Ms Wall is to become an adviser to Charles Clarke, the Education Secretary.

The enhanced terms and conditions enjoyed by Ms Wall, a member of Labour's national executive committee, put her comfortably above any deal awarded to Amicus members, who are receiving pay rises averaging 3.2 per cent.

Ms Wall's terms and conditions were set in September by the MSF section of the newly merged union before it was fully integrated with the engineering division. As part of the deal she was given the title of director of policy, but her duties remained the same.

According to Tribune magazine, two other Amicus MSF officials, Sarah Howard and Roger Jeary, were awarded similar increases. Bill Walsh, who is retiring this month as assistant general secretary of the union, received a pay rise of £13,000, giving him a final salary of £68,000 - worth an extra £8,500 a year on his pension, the magazine said. Derek Simpson, the joint general secretary of the organisation, has since taken full operational control and revealed yesterday that he had warned the MSF section not to finalise any pay deals until a job evaluation throughout the union was undertaken. But Roger Lyons, the leader of the MSF section, said it had been Mr Simpson's decision to bring forward the voluntary severance package.

Ms Wall, 62, said the pay increase had put her on the same salary as her opposite number.

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