SAINSBURY'S faced a storm of protest from shareholders over its decision to give ousted chairman Sir Peter Davis a £2.3m share award.

Yesterday, Investors at the company's annual meeting in London called on the board to apologise for the award, which the supermarket group has since withdrawn.

Amid shouts of "resign" and "shame", one shareholder branded the affair an appalling fiasco that had damaged the company deeply.

Another shareholder demanded to know what action Sainsbury's was going to take to stop a repeat of the situation, which has led to the start of a legal battle between the company and Sir Peter.

The company has since reversed its decision to make the award, saying new information had come to light since it made the award.

The chairman of the meeting, Lord Levene, said he was not in the least bit surprised that shareholders had been confused by what had happened, but he said the Sainsbury family believed it was in the interests of the company and its shareholders to approve the remuneration report, given that it had no implications for Sir Peter.

Earlier in the meeting, new chief executive Justin King said the company believed it had let down its customers with its disappointing recent performance.

He said: "Our customers say that we have not been looking after them as well as we should have done."

Sainsbury's shareholders approved the company's pay report, with 70 per cent of votes cast in favour and 30 per cent against.