Rishi Sunak has refused to repeat Kemi Badenoch’s claim that the former Post Office boss was lying when he said he was told to delay compensation to Horizon scandal victims.

Sir Keir Starmer asked the prime minister if he is prepared to personally repeat the allegation made by his business secretary regarding Henry Staunton.

Mr Staunton, who was sacked last month, has claimed he was told to stall pay-outs to sub-postmasters due to financial concerns ahead of the general election – something Ms Badenoch has strongly denied.

Mr Sunak did not answer the Labour leader’s question directly, simply saying Mr Staunton was fired because of “serious concerns” about his conduct.

He added: “We have taken up steps to ensure victims of the Horizon scandal receive compensation as swiftly as possible… that remains our priority.”

Sir Keir, speaking at PMQs, pressed him on Ms Badenoch’s statement on Monday that Mr Staunton was “at no point told to delay compensation payments by either an official or a minister from any government department; at no point was it suggested that a delay would be a benefit to the Treasury.”

Asked if he will investigate if that statement is correct, the prime minister repeated that Mr Staunton was asked to step down “after serious concerns were raised”.

The exchange comes after an unearthed memo from Mr Staunton which raises questions about Ms Badenoch’s claims.

It has emerged that Mr Staunton wrote a note on 5 January last year which said that Sarah Munby, the then permanent secretary at the business department, had warned him during a meeting that day not to “rip off the band aid” in terms of government finances in the run up to the election.

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According to the note, seen by Sky News, Mr Staunton said that the Post Office board had identified a financial shortfall of £160m as of September 2022 and that “there was a likelihood of a significant reduction in post offices” if more government funding was not made available.

He wrote: “Sarah was sympathetic to all of the above. She understood the ‘huge commercial challenge’ and the ‘seriousness’ of the financial position. She described ‘all the options as unattractive’. However, ‘politicians do not necessarily like to confront reality’. This particularly applied when there was no obvious ‘route to profitability’.

“She said we needed to know that in the run-up to the election there was no appetite to ‘rip off the band aid’. ‘Now was not the time for dealing with long-term issues.’ We needed a plan to ‘hobble’ up to the election.”

Labour MP Liam Byrne, who is chair of parliament’s Business Committee, said the note is “a go slow order, without a doubt”. He said his committee will attempt to “flush out the truth” on Tuesday, when Mr Staunton will appear before MPs.

The note has sparked demands from the Lib Dems for Mr Sunak’s ethics adviser to investigate whether Ms Badenoch misled parliament with her accusation that Mr Staunton was lying.

Labour said there needs to be a cabinet office investigation to establish the veracity of Mr Staunton’s claims.

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Row over disputed memo

Earlier, a government source was dismissive of the memo and suggested Mr Staunton was either “confused or deliberately mixing up” long-standing issues around Post Office finances with the payouts to wrongfully convicted sub-postmasters.

They added: “Even if we trust the veracity of a memo he wrote himself, and there’s not much to suggest we can, given the false accusations he made about the Secretary of State in his original interview, it’s time for Henry Staunton to admit his interview on Sunday was a misrepresentation of his conversations with ministers and officials and to apologise to the government and the postmasters.”

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Was ousted boss asked to delay compensation payments?

In his original interview with the Sunday Times, Mr Staunton claimed that he was ordered by a senior civil servant to stall spending on compensation for Horizon victims to allow the government to “limp into the election”.

He said it “was not an anti-postmaster thing, it was just straight financials”.

He also claimed that when he was sacked he was told someone had to “take the rap” for the Horizon scandal, which came under renewed public scrutiny following the ITV drama series Mr Bates Vs The Post Office.

Mr Staunton has stood by his claims in the face of government denials, insisting that there was “no real movement” on the payouts until the airing of the ITV drama.

On Monday, Ms Badenoch said the claims are “completely false” and accused Mr Staunton of seeking “revenge” after he was sacked.

She also claimed he was being investigated over bullying allegations before he was dismissed from his short-lived post – something he has denied.

He has said he decided to go public “out of a desire to ensure that the public were fully aware of the facts surrounding the multiple failures that have led to postmasters in this country being badly let down”.

The Horizon scandal saw hundreds of sub-postmasters prosecuted because of discrepancies in the Fujitsu-developed IT system between 1999 and 2015, in what has been called the biggest miscarriage of justice in UK history.