Chancellor Jeremy Hunt has declined to express confidence in Nick Read’s position as chief executive of the Post Office.
Downing Street had offered assurances over Mr Read last week after it emerged he was under investigation after former Post Office chairman Henry Staunton highlighted the existence of an 80-page report compiled by the organisation’s HR director.
Asked on Times Radio if Mr Read’s position is tenable after recent reports and a select committee appearance, Mr Hunt said: “Everyone deserves a chance to make their case.
His comments came as The Sunday Times reported that Mr Read threatened to resign if he did not get more money and was the driving force behind repeated attempts for pay rises including calls made by Mr Staunton.
Mr Staunton’s comments about the 80-page report came at an evidence session with MPs on the Business and Trade Committee on Tuesday.
He told the committee that Mr Read had said he was going to resign because he was “unhappy with his pay”.
On Wednesday, business minister Kevin Hollinrake told MPs in the House of Commons that Mr Staunton had urged ministers to double the pay of Mr Read to prevent him quitting the organisation.
The company’s executive directors do not set their own remuneration and this is done by the remuneration committee, with outside advice and agreed with the Government.
As a commercial organisation and like other firms, the Post Office offers a number of different remuneration incentives to its executives in order to attract and retain them.
Mr Staunton, 75, previously said he had been told to delay payouts to subpostmasters affected by problems with the Horizon computer system, which led to Business Secretary Kemi Badenoch to accuse him of spreading “made-up anecdotes”.
The Horizon IT scandal saw more than 700 subpostmasters prosecuted by the Post Office and handed criminal convictions between 1999 and 2015 as Fujitsu’s faulty Horizon system made it appear as though money was missing at their branches.
Hundreds of subpostmasters are still awaiting compensation despite the Government announcing those who have had convictions quashed are eligible for £600,000 payouts.