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A 2010 report suggested that the fault for such rows lay less with health and safety law and more with a growth in compensation culture.

Last year’s colossal awards sprouted from a well-developed corporate compensation culture, in which boards, consultants and executives preach the gospel of “pay for performance,” which typically links C.E.O. compensation to the company’s stock price.

A so-called compensation culture of personal injury claims has driven up insurance costs, crippling many businesses.

And he accused the government of being complicit in allowing a PPI compensation culture to develop.

Mr Flanagan denied the payouts were an indication of a compensation culture.