The boss of failed care home provider Southern Cross has revealed he will turn down a £500,000 payout when he leaves the company, as new details were released of prospective new owners.

Chief executive Jamie Buchan was brought in two-and-a-half years ago to rescue the UK’s biggest care homes provider but was forced to accept defeat when landlords rejected a plan to reduce rents across its 752 homes.

Darlington-based Southern, the UK’s largest care home operator with 31,000 residents, is expected to close down by the end of the year.

Mr Buchan today said he would step down when the process of transferring the homes is well advanced but will “not avail himself of his contractual rights for compensation for loss of office”.

This would have seen Mr Buchan, who in February voluntarily reduced his pay by 20 per cent to £344,000, receive a year’s salary and benefits, understood to be worth some half a million pounds.

Chairman Christopher Fisher said: “Jamie Buchan’s decision not to take compensation when he steps down as chief executive later in the restructuring process is entirely consistent with the tireless and selfless approach he has adopted while leading the management team.”

The GMB union said it had been given a list of over 30 prospective operators for 691 of Southern’s homes, with none yet found for around 60.

National officer Justin Bowden said: “Local councils and the Care Quality Commission have a duty to assess the fitness of these operators to run these care homes properly.

“Operators must have the financial strength to take over these homes to provide decent standards of care to residents without a repeat of the financial difficulties Southern Cross encountered.”