The Ministry of Justice today defended redundancy deals worth £1.4 million that were made with just 16 civil servants.
The department said the severance agreements, worth an average of £87,500 per person, would save money in the long run.
But campaigners described the awards as "astonishing" and warned that such generous contractual terms could hinder the Government as it seeks cuts to deal with record deficit and debt levels.
The payouts were revealed in a written parliamentary answer from new Justice Secretary Kenneth Clarke, who said 16 staff members from the department and its agencies had been made redundant or faced compulsory severance in 2009/10.
"The overall cost was £1.4 million, an average of £87,500 per staff member," he told Labour's David Anderson (Blaydon).
"Redundancy packages vary, based on grade and length of service."
The Ministry of Justice was unable to provide further information about the 16 staff members, including seniority and how long they had been at the department.
But a spokesman said: "Wherever possible, the Ministry of Justice seeks to achieve headcount reductions through natural wastage, recruitment controls and re-deployment of staff to avoid impacting services to the public.
"The decision to make a member of staff redundant is only taken if a business case can clearly demonstrate that costs of redundancy are exceeded by savings to the department."
The revelations came on the day the Government's new working group to eradicate waste was meeting for the first time.
Yesterday Chancellor George Osborne appealed for the public to help identify where cuts can be made, saying reducing spending by billions of pounds was a "national challenge".
TaxPayers' Alliance research director Matthew Sinclair called on ministers to find ways of curbing future redundancy payments as it tries to rein in spending.
"Thanks to politicians hiking spending and driving up the number of bureaucrats to unsustainable levels, there are likely to be job losses in the public sector and that can't come with this kind of astonishing price tag," he said.
"Action needs to be taken to limit these payments and organisations shouldn't be offering such generous contractual terms in the first place.
"Cuts are necessary to address the dire crisis in the public finances and the Government's freedom to manoeuvre shouldn't be limited by excessive payouts that prevent essential reductions in headcount."