Sources: Nicholson 'did not approve Wass pay deal'

Sources at NHS England said Sir David stepped aside from the decision making process, which was handled by a remuneration committee chaired by NHS England chair Sir Malcolm Grant.

It is understood the decision to offer Ms Wass a two-year “secondment” was made after a senior level restructure sparked by the arrival of Sir David’s replacement Simon Stevens.

Mr Stevens, who takes up his role on 1 April, has appointed Department of Health director general Karen Wheeler as NHS England’s director for transformation and corporate operations, meaning Ms Wass was at risk of being made redundant, HSJ has been told.

This meant she would have been entitled to a two-year redundancy payment, thought to be in excess of £300,000, plus six months’ notice pay worth more than £77,000.

The committee agreed to the two-year pay deal and her “secondment” to the University of Leeds where she will work as an organisational development consultant, because it represented best value for the taxpayer as there would be no payment in lieu of notice.

Should Ms Wass leave her position at the University of Leeds or get a different job the salary payments from NHS England will also stop.

HSJ understands senior civil servants at the DH were aware of the decision.

A spokeswoman for NHS England claimed there would be “real benefits” from Ms Wass’ role at the University of Leeds and from encouraging links between local education and the healthcare sector. This was “particularly true in Leeds where the NHS and the university are two of the city’s largest employers and it is crucial they have a strong relationship”.

Ms Wass, who was NHS chief of staff at the DH before moving to NHS England, has made clear she has no intention of returning to her role.