A dispute broke out between Badenoch and the former postmaster

A row between Business Minister Kemi Badenoch and the former Postmaster General has worsened after he claimed he was asked to delay compensation payments to sub-postmasters.

Henry Staunton said he was asked to defer payments to allow the government to “interfere in the election,” apparently to help the state's finances.

But Ms Badenoch said the allegations were “completely false” and accused him of spreading “made-up stories”.

Mr Staunton stood by his comments.

The row first erupted at the weekend when former Postmaster V Interview with the Sunday Times, A senior government employee asked him to slow down compensation payments to postmasters.

Between 1999 and 2015, hundreds of postmasters and postmasters were wrongly sued after a faulty computer system called Horizon made it appear as if money was missing from their branches.

Some subpostmasters went wrongfully to prison, and many were financially ruined. Some have since died.

The government has promised to quash the convictions and pay compensation, but concerns have been raised about the speed and complexity of victims obtaining financial compensation, with only 33 claims being fully settled.

Mr Staunton, who has sat on the boards of companies ranging from ITV to WH Smith, was appointed Postmaster General in December 2022, but was sacked by Ms Badenoch last month.

He told the Sunday Times that early in his roles, “I was told by a fairly senior person to procrastinate on compensation spending and replace Horizon, and to limp in quotes – I wrote a file note about it – limping into the election.”

“It wasn't anti-postmaster, it was just straight financial matters,” he said. “I didn't ask, because I said, 'I have no role in this, I'm not here to interfere in the election, and that's not the right thing for postmasters to do.'

His comments sparked critical reactions from Ms Badenoch on social media on Sunday, before the Business Secretary made a statement to the House of Commons on Monday in which she said Mr Staunton's claims were “completely false” and a “blatant attempt at post-dismissal retaliation”.

She added: “There will be no benefit to us at all from delaying compensation.” “This has no significant impact on revenues at all – it would be crazy to even suggest it.”

She said there was “no evidence at all” that an official had asked Mr Staunton to defer compensation payments, later adding: “Indeed, if such a thing were said, it would be the responsibility of Mr Staunton himself to provide evidence.”

In response to Ms Badenoch, a statement from Mr Staunton said he stood by the suspension and that he had “recorded at the time in a file note which he had emailed to himself and colleagues, and thus traceable to the Post Office server”. .

The Post Office told the BBC it would not be appropriate to comment “on confidential emails that are alleged to have been sent or not sent”.

“Mr. Staunton was not accustomed to resorting to fabrication or invention, and decided to go public out of a desire to ensure that the public was fully aware of the facts surrounding the multiple failures which resulted in this country's postmasters being so badly let down,” the statement added.

Mr Staunton himself said it was in the Post Office's “interest” to speed up “progress in the exoneration process and that compensation for wrongly convicted Postmasters was more generous, but we saw no real action” until an ITV drama depicting the scandal aired earlier this General.

“We will leave it to others to come to a conclusion about why this happened,” he added.

Mr Staunton also claimed that when he was sacked, Ms Badenoch told him: “Someone has to take responsibility.”

The government denied allegations of compensation delays, and Ms Badenoch told MPs the reason she sacked Mr Staunton was because “there were serious concerns about his conduct as chairman, including those raised by other directors on the board”.

“While he was in office, a formal investigation was launched into allegations relating to Mr Staunton’s behaviour, which included serious matters such as bullying,” she said, adding that concerns had also been raised about his “willingness to co-operate” with the investigation.

She added, “It is extremely disappointing that he chose to spread a series of lies, provide made-up stories to journalists, and leak confidential discussions.”

In response to the bullying allegations, a spokesman for Mr Staunton said this was “the first time the existence of such allegations has been reported”.

“Mr. Staunton is not aware of any aspect of his behavior that could give rise to such allegations,” the statement added. “The Secretary of State certainly did not raise these matters at any stage, and certainly not during the conversation that led to Mr Staunton's dismissal.

“Such behavior would in any case be completely out of character.”

Late on Monday, a transcript of Mr. Staunton's January 27 dismissal phone call was made public. She noted that the Business Secretary had received a briefing on “management issues at the Post Office” and that the complaints against Mr Staunton were “so serious” that the Government needed to intervene.

The reading did not include the exact words “someone's got to handle the rap”, but Mr Staunton said he stood by his “characterization of the conversation”.

Jonathan Reynolds, Labour's shadow business secretary, said there were now “two completely contradictory accounts, one from the former head of the Post Office and one from the foreign secretary”.

“Only one of these accounts can be the truth,” he said. “What we need now is transparency and scrutiny.”

Liam Byrne, Labor MP and chair of the Business and Trade Committee, told the BBC he had contacted Staunton to attend next week's session.

The committee will hear evidence from Post Office chief executive Nick Read and Alan Bates, the former postmaster whose fight against the Post Office inspired a recent ITV drama about the scandal and brought it back into the spotlight.