Calls for Byers to return £17,000 pay-off

Stephen Byers faced calls last night to refuse the £17,000 pay-off he is due for his resignation from office this week.

MPs condemned the tax-free severance payment as an insult. Don Foster, the Liberal Democrats' Transport spokesman, said the payment was a disgrace. "Mr Byers' severance payment is a final kick in the teeth for the travelling public. The decent thing to do would be to refuse to accept the money so that it can be invested in improvements in the railways."

The former transport secretary is entitled under government rules to £17,465, equivalent to three months of his £69,000 ministerial salary. The pay-off is £5,000 more than Peter Mandelson received when he stepped down as Northern Ireland Secretary. The taxpayer will have to foot the bill for the severance pay and the Inland Revenue will not be able to claim tax. Mr Byers will not face questions about his pay-off after he withdrew yesterday from BBC Radio 4's Any Questions, on which he was due to appear today.

Stephen Byers' departure sparked recriminations in the Labour Party. John Prescott, the Deputy Prime Minister, attacked the Transport select committee and its chairwoman, who published a damning report on the railways last week. "The select committee and Gwyneth Dunwoody put the final knife in Stephen Byers' back," he said.

But one committee member, Louise Ellman, MP for Liverpool Riverside, said she was amazed by the claim. "Stephen Byers was a marked man. He clashed with vested interests over Railtrack," she said.