Payoffs given to senior officials from a public sector spending watchdog have been labelled "unacceptable" by Downing Street.
Marcine Waterman and Neil Swift received six-figure payoffs only to move into other related jobs after the Audit Commission was shut down, The Sun reported.
Number 10 said rules were being tightened up to restrict payoffs and recoup redundancy payments in future if officials land another taxpayer-funded job.
The newspaper reported that the commission's £137,000-a-year boss Ms Waterman received £244,000 in redundancy and contractual payments, then became chief executive of the Single Source Regulations Office (SSRO), a quango which monitors defence contracts for good value.
Associate controller Mr Swift, who earned £107,000 a year, was handed £131,260 in redundancy and contractual payments but also found a new role at the SSRO.
The Sun said £800,000 was added to the pension scheme of associate controller Jon Hayes, which he will get if he is made redundant in two years.
Mr Hayes, who was on £104,000, is now chief officer of Public Sector Audit Appointments, a company which is ultimately owned by the Local Government Association and has taken on some of the now defunct commission's functions.
Prime Minister David Cameron's official spokeswoman said the terms of the payouts were set by the Audit Commission and the Government expressed concerns at the time.
The spokeswoman said: "This is an unacceptable situation, particularly when we are taking tough decisions across Whitehall on how you cut down on wasteful spending."
She added: "I think what it does do is illustrate the importance of tackling this issue moving forwards, that's why we are bringing in a cap on public sector payoffs and making sure that high earners have to repay redundancy money if they leave and return to the public sector within a year."