The decision is the latest by Barham Saleh, considered one of Iraq's most able politicians, to increase confidence in the Kurdish government after a July election that was fought largely over corruption and governance.

"A decision was taken by Barham Saleh that 10 percent of the salaries of the senior people be allocated to investment," Tarek Jawha, an MP in the regional assembly, told AFP.

"He requested parliament to legislate on this."

Jawha said that the pay cut would apply to ministers, senior officials and high-ranking security officers.

Before resigning as one of Iraq's two deputy prime ministers, Saleh was seen by Western diplomats as one of the most progressive and professional members of the Baghdad government.

He had also taken a leading role in attracting much-needed foreign investment to the war-ravaged country.

Saleh campaigned in July's elections for an alliance comprised of the two dominant Kurdish factions -- the Kurdistan Democratic Party (KDP) of Kurdistan president Massud Barzani and the Patriotic Union of Kurdistan (PUK) of Iraqi President Jalal Talabani.

That poll saw the election of the region's first credible opposition, the Goran ("Change" in Kurdish) bloc.