A BUS company which became mired in a bitter boardroom row that sparked an exodus of directors has announced it will overhaul its controversial pay structure in a bid to end the "bonus culture" that pervaded its upper echelons.

The move comes after more than two years of infighting among board members of the publicly-owned Lothian Buses in Edinburgh following allegations from three executives about former chief executive Ian Craig's "abrasive management style".

It eventually lead to the departure of four directors and the company's chairwoman.

Read more: First images of new 'civic heart' for Edinburgh

Mr Craig was cleared of any wrongdoing following an investigation.

Amid the unrest, it is understood two departing directors, Norman Strachan and Bill Devlin, were first stripped of their bonuses totalling £95,000 before seeing them reinstated after the threat of a legal challenge.

They will now be replaced by current Lothian Buses employees, Sarah Boyd and Nigel Serafini, who will join managing director Richard Hall on the new board.

One vacancy remains following the earlier departure of previous operations director Bill Campbell.

A council source said the pay overhaul would mean “an end to the bonus culture” at Lothian Buses that saw 14 top level managers wrack up a total salary bill of £1.74 million

Once all four new executive directors are in place it will save the taxpayer £430,000 a year.

Council leader Andrew Burns said the move would "help build a positive, constructive relationship going forward."

Read more: First images of new 'civic heart' for Edinburgh

However, a source connected to the bus firm raised concerns that the new roles had not been advertised.

A report to go before councillors next week states: "As at January 2015, the top level managerial structure of Lothian Buses had 14 staff, with a total remuneration of £1.74m.

"As part of a planned restructure of the management team, it is proposed that the new senior structure will have a total remuneration of £1.31m, a reduction of £430,000.

"This will mostly be achieved through the removal of bonus payments for staff and recruiting successors at lower salary levels.

The report also states: "Lothian Buses took a number of steps to assess their suitability for the positions, and enable the Remuneration Committee and Board to be satisfied that they are the correct appointees."

The former directors at Lothian Buses, who previously earned between £190,000 and £270,000, were involved in the unseemly row played out in public after a series of confidential documents were leaked.

Read more: First images of new 'civic heart' for Edinburgh

At the end of 2014, former CEO Ian Craig was subject of a grievance procedure against him by three directors allegedly relating to his abrasive management style and accusations he failed to consult colleagues over significant decisions.

At one stage one leaked Edinburgh City Council document described the leadership as “dysfunctional”.

The council was prompted to overhaul the management team with a “phased approach to resolve the challenges of the dysfunctional executive director team and secure leadership and control”.

Chairman of Lothian Buses Jim McFarlane said: "As previously stated, the remuneration committee for Lothian Buses undertook external benchmarking by a leading independent HR consultancy to ensure that the salaries of the senior team were appropriate for the specific roles.

“Following the appointment of a new managing director earlier this year, he has undertaken a comprehensive review of the business organisational design which has resulted in a new structure for the senior management team that will take the business forward.

“As detailed in the report submitted to council, this will result in substantial ongoing efficiencies being achieved in the business."