£500,000 payout for failed Tube chief

Four other bosses will receive £700,000 between them - and the taxpayer will foot the bill.

They were formally sacked today by Ernst & Young, the administrator now running the company which went bust because it could not control its costs.

Chief executive Andrew Lezala and the others have a week to clear their desks.

Metronet was responsible for running and upgrading two-thirds of the Tube network but passengers suffered a series of major delays and cancellations. Transport for London announced it wants to take over the operation.

Sources said Ken Livingstone had been personally involved in the departures of the executives after describing the company as "dead as Monty Python's parrot".

An industry source said: "It would be fair to say that senior management at Metronet did not enjoy the full confidence of the Mayor."

Brian Cook, chairman of TravelWatch, condemned the payments and said: "It is very regrettable that either the taxpayer or the fare payer will end up paying the bill for these people who have run a thoroughly disgraceful company."

Mr Lezala, along with the chief finance officer Philip Pacey, senior vice president (commerce) Ken Owen, senior vice president (change management) David Clark, director of communications Paul Emberley, will all stop work immediately.

They are expected to receive a year's salary. The chief financial officer is believed to have been paid at least £200,000 a year, the two senior vice-presidents around £175,000 each and the communications director around £150,000.

They will also take the pension pots they built up while with Metronet. The cash will formally be paid by Metronet on the orders of administrators Ernst & Young. A spokesman said: "We would not discuss any financial aspects of their going."

But Metronet has no funds of its own and is continuing to operate while in administration thanks to £1 billion of cash provided by Transport for London - meaning the pay-offs are effectively from public funds.

Today their severance deals were called an "award for failure" by critics who said they should have received nothing.

Although others have shown an interest in Metronet, industry observers say TfL is odds-on favourite to take over. TfL refused to say how much it is willing to pay but pledged there would be no extra cost to fare-payers.

Administrator Alan Boom will have to decide if their bid is in the best interests of Metronet's creditors. Metronet was responsible for upkeep of all the subsurface lines, including the Circle and District, along with the Bakerloo, Central and Victoria lines.

But it crashed in spectacular fashion when it failed in its demand for an extra £1 billion for extra work the company claimed it had done on the deep level routes. It was also planning to claim a similar amount for the subsurface lines.

Tim O'Toole, London Underground managing director, said: "In dealing with the collapse of Metronet, and through the administration process, we have had two priorities. First, to ensure the continued safe and reliable operation of the Tube network for passengers. Secondly, once under TfL control, we seek to put in place a stable, economic and efficient structure that is better able to deliver our investment priorities that will lead to increased capacity on the Tube in future."