Ken cronies' £1.6m payoff

The former senior City Hall advisers were political appointments on fixed-term contracts. By lawthey had to lose their jobs when Mr Livingstone lost the election.

Last year, Mr Livingstone introduced a rule which allowed them severance payments by giving them the same redundancy rights as permanent employees.

They are now to get an average of £200,000 each after several appointed solicitors and threatened to sue the new Mayor, Boris Johnson, for "unfair dismissal".

Those getting payoffs include John Ross, Mr Livingstone's economic adviser; Redmond O'Neill, his adviser on transport; Simon Fletcher, his chief of staff, and Mark Watts, his climate change adviser, all of whom are current or former senior members of Trotskyite group Socialist Action.

Mr Ross, Mr O'Neill and Mr Fletcher were the key members of what was dubbed the "Kenocracy," the fanatically loyal group of advisers who worked for Mr Livingstone long before he became Mayor and who imposed his will on City Hall. Others being paid off include John Duffy, Mr Livingstone's adviser for waste; Murziline Parchment, his director of major projects, and Joy Johnson, his former head of PR. None was available for comment.

Mr Livingstone's most controversial former adviser, Lee Jasper, gets no money because he was forced to resign after investigations by the Standard.

The payoffs are calculated on their years of service and are so high because each was paid a minimum of £121,000 a year, among the most generous salaries in local government, while employed at the Greater London Authority.

The average payout to the eight is significantly greater than the " resettlement grant" Mr Livingstone is getting, believed to be between £68,000 and £90,000. They will be paid in full whether or not they get other jobs.

The eight staff were appointed by Mr Livingstone under section 67, subsection 1, of the GLA Act, which allows the Mayor to hire two political advisers and up to 10 other staff. The Act says that "no appointment under sub-section 1 above shall be such as to extend beyond the term of office for which the Mayor was elected". It does not make any mention of severance payments.

Last year, however, Mr Livingstone changed the rules. In a written report to the Assembly on 17 October, unnoticed at the time, he said that he had "agreed to incorporate [a] revised compensation payments policy... into the employment contracts" of his political appointees.

The new policy, following one previously agreed for "non-political" GLA staff by the London Assembly, said that "fixed-term employees are subject to the same employment rights as permanent employees and will be eligible... for redundancy rights after two years". A spokeswoman for Mr Johnson said he was "dismayed" to have been forced to make the payments but had been advised that there was no alternative. "The legal advice was that their rights under employment law outweighed the provisions of the GLA Act," she said. "The Mayor feels that the law is flawed on this issue."

Tony Travers, London government expert at the LSE, said: "I think most people will be shocked. You could do quite a lot about knife crime with £1.6 million. It is odd indeed that the full benefits of labour laws designed to protect the vulnerable are being claimed by courtiers who knew they would lose their jobs if their master lost the election. I don't think people inside the system understands how this merry-go-round of excess looks to outsiders. It is, to put it kindly, generous for Boris to be paying this - but it also unquestionably damages Ken."

Mr Travers said one reason why the advisers might have sought the money would be to finance Mr Livingstone's declared campaign for re-election in 2012, or at least to allow them to support themselves while they work for him. None of the advisers is yet believed to have found another job. But he added: "This damages Ken's credentials for running again. It undermines any sense of his being a man of the people."

Lib-Dem Assembly member Dee Doocey condemned the payments as "totally inexcusable." She said: "I used to be finance director for the Liberal Democrats and I dealt with the secretaries and researchers of MPs who lost their seats. They got little or nothing. It seems like there's one law for the ordinary working person and one law for the political class."

However, Mr Livingstone said: "It's a question of what the law requires. Either there's a legal responsibility or there isn't." He said he was aware of his advisers' legal claims but had "not been involved" in their discussions with the GLA. He added that he changed the rules last year on legal advice following a change in the law.

Three further staff of Mr Livingstone's, including his partner, Emma Beal, who managed his City Hall office, are pursuing as yet unresolved complaints against the GLA.