Dr Paula Vasco-Knight was not only the chief executive of Torbay Hospital in south Devon but was also the national lead on equality and diversity.

She was accused by two whistleblowers of selecting her own daughter’s boyfriend as an equality and diversity manager at her own Trust.

Dr Vasco-Knight, who later quit her job after being suspended, had denied the claims saying:”On a personal level I found the allegations as nothing less than personal slander and I wonder if a white middle class male chief executive officer would have been treated with such disrespect.”

The Exeter tribunal ruled that she tried to accuse the two female whistleblowers of malice as well as manipulate an inquiry and made a ‘dishonest attempt to suppress’ its report findings in a bid to protect herself.

The tribunal ruled that both whistleblowers – 57 year old Clare Sardari, from Brixham, Devon, and 53 year old Penny Gates, from Ivybridge, Devon – had suffered a detriment by making the allegations.

Miss Sadari, a management development head, believed the appointment of Nick Schenk, who was in a relationship with Dr Vasco-Knight’s daughter, involved ‘nepotism and favouritism’ and was concerned that Dr Vasco-Knight was in a senior position and was national lead on equality matters.

The pair raised their concerns with a senior colleague, Adrienne Murphy, who told them they would lose their jobs ‘through dirty means’ which left themfeeling ‘bullied, threatened and intimidated’.

Tribunal judge Nick Roper ruled:”We find that there was a concerted effort by the South Devon Healthcare Trust to manipulate the investigation, accuse the claimants of malice, suppress the report and to mislead the other parties as to its contents, with the apparent aim of protecting DR Vasco-Knight and Mrs Murphy against the force of the claimant’s allegations.

“This was completely contrary to the protection which they should have been offered under the Whistle Blowing guidelines.”

Miss Sadari returned to the tribunal where Judge Roper revealed she would receive a £228,000 payout which includes back pay and pension benefits, agreed damages, legal costs and £33,000 compensation for injuries to feelings.

The money will be paid by her ex employers, the South Devon Healthcare NHS Foundation Trust who Dr Vasco-Knight, CBE, was chief executive of before she resigned to return to the north of England.

The Trust said when she quit that ‘considerable success was achieved during her tenure’ and it was ‘unfortunate her achievements had been overshadowed by the tribunal judgement’.

A tearful Miss Sadari left the tribunal without making any comment.

It was also revealed that the other whistleblower, Mrs Gates, had returned to work at the hospital under a separate settlement