Ministers will today announce further details of laws aimed at preventing senior council managers taking exit payments only to be rehired on similar terms elsewhere in the sector.

Proposed legislation contained in the Small Business Enterprise and Employment Bill would force top council managers earning more than £100,000 a year who took a new job another local authority within a year of departure would have to pay back their redundancy package in full or in part.

But the laws would only cover local government and the NHS, with exemptions made for the armed forces, the BBC and the Bank of England, and the legislation would only apply to new contracts.