François Barrault, the former head of a BT division that posted a multibillion pound writedown last month, walked away with a £1.6 million payoff when he resigned last November.

Combined with his salary and other benefits, Barrault, head of BT Global Services, received a total remuneration for the year of £2.9 million. His boss, BT chief executive Ben Verwaayen, took a £700,000 payment when he left the company four months earlier, as well as a £300,000 bonus.

This was despite BT's plans to lay off 15,000 jobs as the Global Services IT division booked £1.6 billion in contract charges for the 2008 financial year. Two struggling IT contracts were reportedly to blame for the writedown, including the multibillion pound NHS patient record rollout, as well as a contract with Reuters. BT has not elaborated on the reports.

The move angered union officials. "François Barrault's pay-off is outrageous,” said Andy Kerr, deputy general secretary at the Communication Workers Union. “He is being rewarded for failure.”

The company has now cancelled plans to boost top management bonuses. It has also introduced a “clawback” clause for executive share scheme, which will allow it to take back unsecured awards if BT decides payments were a “misjudgement”.

Details of the executive pay-offs emerged in BT’s annual report. It has already said it will freeze pay for its 85,000 staff in the UK.

“We’re disappointed to have to make such a large payment to François, but the company is honouring its legal and contractual obligations,” a BT official told the FT.

The current chief executive at BT, Ian Livingston, received a bonus of £343,000 for hitting customer service and green targets. He has said he will convert his bonus into shares.