Royal Cornwall Hospitals Trust spent nearly £380,000 on a legal battle with its former chief executive, it admitted this week.

An employment tribunal in March 2010 ruled John Watkinson had been unfairly dismissed for planning to act as a “whistleblower” over plans to move some cancer treatment to Devon.

He was initially awarded £1.2m compensation for unfair dismissal, reduced to £885,000 on appeal this year.

But a spokeswoman for the trust, which has £25m outstanding debts, this week confirmed it had spent £378,599 on the legal costs of fighting Mr Watkinson’s claim. “It is regrettable that the trust had to spend any money on this case but [it] stands by the decision to try and get a fair outcome,” she said.

The trust did save £221,852 by appealing the original award. However, compensation plus costs now equals £1,263,599.

The trust has accepted the unfair dismissal verdict but is appealing against the tribunal’s ruling that the dismissal resulted from Mr Watkinson’s “whistleblowing”.

The Royal Cornwall plans to reduce its 4,383 workforce by 400 whole-time equivalents in this financial year, in a bid to make £19m savings.