Tesco u-turn on payments block

Tesco has reversed its decision to suspend more than £2m in severance payments to two former bosses as it seeks to avoid a costly legal battle over an accounting scandal that hit the supermarket last autumn.

The decision means Philip Clarke and Laurie McIlwee will walk away with combined cash and share awards worth up to nearly £13m – at a time when thousands of Tesco staff face the axe under new boss Dave Lewis’s turnaround plans.