By his gesture, he has put pressure on his Cabinet colleagues to follow suit, although he says it is a personal decision and he does not expect them to do the same.

In doing so, Lee has stamped his personal leadership on the country since becoming Prime Minister two and a half years ago.

He also announced that he would, by 2011, name a successor to take over in 10 years’ time. It is the first time he talks of a departure timetable.

His surprising announcement comes at a time when many Singaporeans are increasingly bitter over the 55% leap in ministers’ remuneration over their objections.

Lee’s own salary would have jumped from S$2.46mil (RM5.58mil) a year to S$3.1mil (RM7.03mil), five times more than that of President George Bush, leader of the world’s most powerful economy.

With immediate effect, the salary structure (in Singapore dollars) is: President – $3,187,100 (24.9% increase), Prime Minister – $3,091,200 (25.5% increase), Senior Minister – $3,043,300 (13.5% increase), Minister Mentor – $3,043,300 (13.5% increase), Deputy Prime Minister – $2,452,500 (18.8% increase), Minister and Senior Perm Sec – $1,593,500 (32.5% increase) (MR4 Grade), Entry Superscale Grade – $384,000 (3.3% increase) [SR9 Grade], MP – $216,300 (23.2% increase)

The government led by Minister Mentor Lee Kuan Yew had launched a major campaign in the media and Parliament, where he controls 82 out of 84 seats, to convince the nation – but failed.

The outcry was widespread among middle-class Singaporeans who earn an average of S$1500 (RM3,400) a month.

“They have crossed the line,” is a common view. The poorest 10%, struggling with S$300 (RM680.70) a month, was livid.

They see the idea of a government paying itself millions of dollars more in salaries, while raising welfare payment to the needy by a piffling S$30 to S$290 (RM658.34) a month, as extremely poor taste.

Lee’s surprising offer has raised his personal esteem in the eyes of some heartlanders and defused some of the anger.

Hard-core critics, however, dismiss it as “damage control”, with one saying: “Too little, too late. Too bad.”

“I want to make it clear to Singaporeans that my primary considerations are for the future of this nation, and not for my own salary,” said the 55-year-old Prime Minister.

Although not fully placated, since the pay rise remains in place, Singaporeans are, however, hoping that his action is the start of a change of policy.

With their PM setting the example to turn down the unpopular pay rise, it will be difficult for ministers and MPs to do nothing.

Already backbencher Lily Neo has become the first to follow, saying she will turn over her increase in MP's allowance to the needy in her constituency.

Singaporeans are generally angry at this government lavishness on itself.

(The bottom 10% earns only S$300 a month, their income declining in the last five years.)

Until his pay freeze, the Prime Minister had been a major target of the people’s irk.

In Washington, a senior White House official told a correspondent that he “was floored” when told that Singapore’s PM takes home a salary five times that of Bush.

“I’m going to emigrate and run for office in Singapore,” quipped the senior administration official, who sat in disbelief after reading that story.

By and large, Singaporeans do not quarrel that their leaders are largely corrupt-free and efficient and should be paid well to reflect the city’s progress.

Kuan Yew had initiated the mega-wage policy in 1994 for two reasons.

First, it would prevent the sort of corruption that exists in many countries, and second, it would allow the government to recruit the most capable leaders and retain them from being poached by the global private sector.

But Singaporeans are not ready to see them being paid so many times more than leaders in the richest countries and, in particular, benchmark their earnings to some of the top earners in the private sector.

Public office is about service, not profits. One Singaporean remarked: “Now, when I look at a minister or an MP, I see a $-sign.”

For a long time, people had already been demanding that their payments be reduced to be more compatible with world standards. “Instead they are raising it by another 60%,” exclaimed a Singaporean studying abroad.

In a survey on the media website AsiaOne, only 11.4% of the people surveyed supported the pay increase, while 83.7% said no and 4.9% had no opinion.

Some analysts sense a less than full agreement within the government and party leadership and ranks over the issue.

Some people are asking whether the PM’s decision is a response to the public outcry or reflects a difference of views with Kuan Yew.

(PM Lee said his stand had the encouragement of his father as well as Senior Minister Goh Chok Tong.)

The PAP is a closely-knit party, which has always kept its own affairs within its four walls.

o Seah Chiang Nee is a veteran journalist and editor of the information website littlespeck.com

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