The new legislation will result in savings of at least $19 million a year, and will be seen as an attempt to ward off what appeared to be worsening protests -- demonstrations on Wednesday were the most violent in Iraq since uprisings in Tunisia and Egypt led to the ouster of both countries' strongmen.

"We will submit to the council of ministers next week ... a good substantial reduction, in some cases more than 50 percent, of present salaries," cabinet general secretary Ali al-Alaak told AFP in an interview.

He said the government wanted to convey the message that the new proposal was "linked to... what is going on" and noted that "the gap became very big between them (politicians) and the others."

If approved by the cabinet, the bill will need to be passed by parliament.

The new legislation will reduce Maliki's own salary to 13 million Iraqi dinars ($10,100) per month, from 35 million dinars now, while Iraq's 42 ministers and 325 MPs will receive eight million dinars per month, down from their present salaries of 13 million dinars.

The Iraqi premier had earlier this month pledged to halve his salary.

Alaak said the most important provisions of the bill were the reduction in pension payments -- because MPs and ministers receive pensions based on their final salaries, the reduction in pay means lower payouts for former politicians.

In addition, the bill lowers the percentage of final salary paid out to retired MPs and ministers.

Earlier on Wednesday, a teenager was killed when private guards shot at protesters who set fire to several government offices in the southern city of Kut, capital of Wasit province.

More than 2,000 people took part in the demonstrations calling for the provincial governor to resign over poor basic services.

It began at 9:00 am (0600 GMT) and saw protesters set fire to three buildings -- the offices of the Wasit provincial council, the governorate's main administrative building and the governor's official residence.

Policemen and soldiers fired their weapons into the air in a bid to dissuade protesters, while private security guards employed by Wasit council opened fire directly into the crowd, for which a senior policeman pledged punishment.

Kut hospital put the toll at one dead -- a 16-year-old boy who took a bullet to the chest -- and 27 wounded.

"Measures will be taken against the private guards but after the situation has calmed down," said Major Mohammed Saleh, the top police intelligence officer in Kut.

Earlier, the demonstrators chanted slogans calling on the governor to resign, and held up placards that sarcastically read: "To all citizens: Electricity is only for officials," a reference to Iraq's dire shortfall in power provision.

"We demand that our rights be met, that we have better services and that the authorities fight corruption," said 54-year-old Ali Mohsen, a professor at Wasit university.

"We demand that the governor resign... all we need is services."

Illiteracy, poverty and access to clean water in Wasit are all worse than the Iraqi national average, according to the United Nations, while Transparency International rates Iraq as the world's fourth-most corrupt country.

In the southern port city of Basra, more than 200 unemployed demonstrators gathered in front of the provincial government headquarters, while Shiite clerics in the central shrine city of Najaf urged officials to listen to protesters' demands.

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