Whitehall boss at centre of lost data disc scandal walks away with £400,000 pay-off

The  civil servant in charge of the Whitehall department which lost the personal details of 25million child benefits claimants left with a £400,000 pay-off.

Paul Gray quit as chief executive of Her Majesty's Revenue&Customs last November after two discs were lost in the post.

Within weeks, he moved to the Cabinet Office where he led a project on 'developing civil servant skills' before his contract finally expired in December.

Yesterday it emerged that at the time of his controversial departure he managed to negotiate a retirement package including a £400,000 pay-off.

Days after the initial data disc scandal it emerged that Mr Gray - a father of two - was being paid more than £200,000 a year for his HMRC role.

At the time the civil servant left his job, John McFall MP, of the Commons Treasury select committee, said: 'Instead of falling on his sword he's fallen on a feather bed.'

Officials maintained that Mr Gray was offered the Cabinet Office work because he was on a contract which was due to expire in December and it was more useful for him to work than staying at home.

At one stage he was expected to extend his contract into the first few months of 2008 but this did not happen. Instead he negotiated a retirement package that will be officially revealed when in the HMRC's annual report next month.

The 59-year-old was last night unavailable for comment at the £800,000 home he shares with his wife Lynda in the village of Littlebury Green, near Saffron Walden in Essex.