Essex County Council boss Joanna Killian cut £4,000 from her salary - only to receive a £6,900 bonus.
Accounts show Ms Killian took home £289,173 in 2010/11 - £147,000 more than the Prime Minister - despite previously agreeing to take a five per cent wage cut.
The pay was topped up with a £6,900 bonus and an extra £1,100 towards her pension, despite County Hall having to make £98m worth of cuts.
Local Government Minister Grant Shapps accused Ms Killian of hiking her wage “through the back door.”
Ms Killian, who is also chief executive of Brentwood Borough Council, is now the highest-paid council chief in the country.
A council spokesman said her dual role saved the taxpayer money.
He added: “While Ms Killian did receive a one-off bonus of £6,900 in April, this was for work completed in year 2009/10.
“In October, Ms Killian voluntarily accepted a five per cent reduction in her annual salary and has received no base pay increase or bonus since then.
“To suggest she has had an increase in salary is completely wrong.”