Iheadi Onwukwe, 41, was given the payoff when he left his post as director of public health at Eastbourne Downs Primary Care Trust after what is believed to have been a dispute with a senior colleague.

Sussex Downs and Weald PCT, which has taken over the responsibilities of Eastbourne Downs after a reorganisation, refused to name Dr Onwukwe on confidentiality grounds but his identity was revealed by Norman Baker, the MP for Lewes.

The annual report for 2005-06 says that Dr Onwukwe left his post in May 2005, and separately records: “During the year the PCT paid executive director compensation for loss of office totalling £243,000 through an agreed legal settlement.”

Mr Baker said: “It is unbelievable at a time when health service cuts are being made to think that the NHS can throw away a quarter of a million pounds on a personal dispute.

“It is an incredible and grotesque waste of public money and I will be raising the matter with the Health Secretary. Someone should pay for this and it should not be the taxpayer. This shows how endemic the problem is of the NHS writing blank cheques.”

The trust is carrying out a cost-cutting review that could lead to services at Eastbourne District General Hospital and Conquest Hospital in Hastings being downgraded.

A spokesman said: “The payment was agreed by the board in accordance with NHS guidance. The PCT took advice from the Department of Health and its own solicitors through the process. The payment was properly disclosed in the PCT’s audited accounts and annual report for 2005 to 2006.

“The name of the former director and the reasons for the payment cannot be disclosed as these are the subject of a duty of confidentiality.”

Dr Onwukwe, a Nigerian, who quit his post in May 2005, is believed to live in Wallington, Surrey.

Mr Baker claimed that after the dispute Dr Onwukwe was effectively paid to do nothing before he was finally paid off.

The PCT confirmed that Dr Onwukwe joined the Trust in September 2002 and left in May 2005, but refused to reveal how long any period of suspension had been.

The Department of Health refused to comment and Dr Onwukwe could not be reached.

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