US legislators are furious over a fresh round of bonuses for AIG staff directly involved in the insurer’s downfall.

AIG is preparing to award $US100 million ($115 million) in new bonuses to its financial products division – the same division whose dicey deals led to the biggest bailout in US financial history.

While these “grandfather” contracts are legal, the US Federal Government is urging AIG staff to relinquish the payments. Last year, AIG staff returned 75% of their bonus payments – some $US39 million ($44.9 million) – to the US Treasury

AIG says more than $US20 million ($23 million) in bonuses have been earmarked for the US Treasury, which it believes should “put this matter behind us”.

But Treasury Secretary Tim Geithner says AIG can be compelled to hand over all bonuses under a proposed fee which would recoup $US90 billion ($103.6 billion) from the financial sector over the next decade.

AIG has begun closing its financial products division.