British intelligence agency GCHQ has been given the go-ahead to offer bonuses to staff with cyber expertise in a bid to dissuade them from taking up higher paid private sector jobs, it has been reported.

The agency’s director Iain Lobban admitted months ago that he was unable to compete with the likes of Microsoft and Google, meaning the agency was losing people with the skills needed to address cyber security.

According to the Gloucestershire Echo, the government has now approved bonuses for key staff to help the agency address the problem.

But a spokesman for GCHQ denied reports that that incentives would run into “tens of thousands of pounds” for some individuals.

“We are never likely to be able to compete with high-tech companies on salary alone,” he told Guardian Government Computing. “We clearly value our staff and their contribution to our unique mission in support of the UK’s national security and economic wellbeing.”

MPs and Lords on the cross-party Intelligence and Security Committee reported fears in July about the agency’s inability to retain the level of internet specialists required to respond to cyber threats.

GCHQ director Iain Lobban had told the committee that he was losing cyber experts month-on-month to pay packages three times higher than the intelligence agency could offer.

“They will be working for Microsoft or Google or Amazon or whoever. And I can’t compete with their salaries; I can offer them a fantastic mission, but I can’t compete with their salaries,” he said.

A spokesman for GCHQ told at the time that they would “actively monitor the situation” and that they would welcome a review from the Cabinet Office. But he also said that a “retention payment system” had already been put in place to “maintain our competitiveness with industry where we can”.