A government minister has blasted council chiefs for using “under-the-counter pay-offs to silence departing staff”.

Scores of public sector staff in Sussex have been forced to sign compromise agreements, many of which involved confidentiality clauses, as they leave their roles.

With Brighton and Hove City Council issuing the most in the country over a five-year period, communities and local government secretary Eric Pickles called for an end to the binding agreements.

But council bosses defended the use, saying it was a cost-effective way of resolving issues between an employer and its staff.

Mr Pickles said: “For too long, local government has made departing staff sign gagging orders, often with big pay-offs attached, away from the eyes of those who get left with the bill: the taxpayer.

“When leaving a job councils and their employees need to part ways fairly. Giving out thousands in under-the-counter pay-offs to silence departing staff is not the way to achieve this.

“Councils have a responsibility to the public and transparency is at the heart of that.

“By shining a light on these activities and introducing new democratic checks and balances to stop gagging orders being abused we are helping councils improve accountability in local government.”

The agreements are legally binding writs signed following the termination of employment.

It usually provides for a severance payment. Last month health secretary Jeremy Hunt banned the use of gagging orders which prevented NHS staff raising concerns about patient care in the wake of the Mid Staffordshire scandal.

A Freedom of Information survey found that 256 councils in Britain signed compromise agreements with former staff between 2005 and 2010.

The Argus reported in 2011 that Brighton and Hove City Council had signed the most in this period with 123.

The exact total spent by the local authority is not known because of the confidentiality clause in the deals but payments can be as high as tens of thousands of pounds.

Penny Thompson, the council’s chief executive, said: “Compromise agreements are used in some situations to cover the termination of an individual’s employment and can provide the most cost-effective route to resolving issues with the agreement of all parties.”