It is claimed by the officials that controlling remuneration policies too tightly will be bad for the firm and ultimately the American taxpayer, reports the Wall Street Journal.
Despite the bank being 80 per cent owned by the government, AIG ignored the Treasury and the Federal Reserve Bank of New York earlier this year when it was asked not to pay its executives controversial bonuses.
But the battle between AIG and the government over remuneration has raged on, with Mr Feinberg announcing last month that he had cut the pay levels of AIG's top 13 executives by 57 per cent in 2009.
Earlier this month, AIG's chief executive Robert Benmosche reportedly threatened to quit the company following a stormy meeting with Mr Feinberg over how much he was allowed to pay his staff.
By Claire Archer