Wes Streeting is set to pocket a taxpayer-funded ‘golden goodbye’ of almost £17,000 despite quitting the Government to pursue his own leadership ambitions.

The former health secretary - who resigned on Thursday saying he has lost confidence in Sir Keir Starmer - is expected to accept a £16,876 payout.

Cabinet ministers receive a lump sum equivalent to a quarter of their salary when they leave office - but the rules allow ministers to waive severance payments.

However sources close to Mr Streeting indicated that he would accept the payout as he had resigned 'on principle' rather than being sacked.

But the Conservatives called on the MP for Ilford North to turn down the payment as he had only quit ‘to serve his own leadership ambitions’.

A Tory spokesman said: ‘He can hardly expect the taxpayer to fund a reward for his scheming and plotting - so he should reject any severance payment on the table.

‘Labour’s civil war is doing harm to our economy and our country, and the public are already paying enough of a price for it without having to hand out golden goodbyes to Machiavellian ministers.’

Last September former deputy prime minister Angela Rayner also pocketed a £16,876 ‘golden goodbye’ after she was forced to quit over a tax scandal. 

Ms Rayner - who this week agreed to hand over £40,000 in unpaid stamp duty to settle a dispute with the taxman - has also signalled she is ready to contest any fight for the leadership.

In his 1,000-word resignation letter, Mr Streeting said he had decided it 'would be dishonourable and unprincipled' to continue under Sir Keir.

He told the PM it was clear he will not lead Labour into the next election and blamed the 'unprecedented' local election results, which saw Labour lose 1,500 seats, on 'the unpopularity of this Government'.

Mr Streeting praised what he said were the Prime Minister’s 'many great strengths', but added: 'Where we need vision, we have a vacuum. Where we need direction, we have drift.’

There is still a chance that taxpayers’ will not be out of pocked for Mr Streeting’s severance payment - either if he ousts Sir Keir and becomes PM or if he rejoins the Cabinet under another leader such as Andy Burnham.

The rules state that ministers reappointed to another paid ministerial post within three months are expected to forgo their salary for the first three months to avoid double payment.