Two suspended council heads are to receive a nearly £300,000 combined pay off as their employment is terminated due to questions over past pay rises.

Caerphilly County Borough Council has agreed to end the employment of the deputy chief executive, Mr Nigel Barnett, and the head of legal services, Mr Dan Perkins over alleged past misconduct.

Mr Barnett will be paid £171,000 and Mr Perkins will receive £127,000.

In 2013 the Wales Audit Office (WAO) found Mr Barnett, Mr Perkins and chief executive Anthony O’Sullivan gave themselves pay rises that were ‘unlawful’.

They were arrested on suspicion of fraud and misconduct in public office in 2013 but the charges were dropped. All three were suspended from the council on full pay.

Caerphilly council has investigated the incident.

However, yesterday a Full Council meeting concluded letting Mr Barnett and Mr Perkins go and paying them off was cheaper than continuing with a disciplinary investigation by a Designated Independent Person.

‘The council does not have the ability to deal with cases such as this as it would in other situations because these officers were subject to statutory protection conferred by legislation and the matter could only be dealt with by appointing a Designated Independent Person as required by the relevant law,’ a council spokesperson said.

‘We would like to make clear that they have fully cooperated with the council during a lengthy preliminary investigation.

‘We would particularly like to remind everyone that the criminal charges which had been brought against them, and which have been so heavily publicised, were dismissed by the court and that it would be wrong for any suspicion or stigma attached to that process to remain in anyone's mind.’