The payment is revealed in Polestars accounts for the year to 30 September 2001, which have just been filed.

Brown (pictured) left in February 2001 after nine months in the job, following a failure to implement the groups change programme to the satisfaction of owner Investcorp.

It means Polestar has paid out almost 3m in two years in compensation to former chief executives.

The accounts also reveal a year-on-year leap from 259,000 to 670,913 in the emoluments of the groups highest-paid director. The director was not named.

An accounting adjustment totalling 6.5m was also made, although it is not clear whether this relates to the black hole in the accounts at Chantry.

Polestar also disclosed a huge 47.7m net pension deficit. It said it would "continue to fund its schemes to eliminate any deficit in line with normal practice".

Last years refinancing cost the group 12.4m in fees. The group has provisions of 42.5m for restructuring, which is a condition of the refinancing.

In his review, chief executive Barry Hibbert, who joined just two months before the year end, said: "Some sites will be closed to bring manufacturing capacity into line with market demand and to concentrate production on fewer sites."

Story by Jo Francis