Ten civil servants enjoyed a “mind-boggling” return of £107m under a deal they helped negotiate during in the privatisation of Qinetiq, the defence research group, according to the findings of a highly critical investigation into the 2003 deal.

The inquiry by the National Audit Office, the independent spending watchdog, accuses the government of selling the group too cheaply and allowing the 10 executives – who went on to lead Qinetiq through to privatisation – to negotiate the terms of their own incentive scheme even before the preferred bidder was chosen. The result was that for an initial investment of £537,000, they secured stakes worth £107m – a 19,900 per cent return.