The federal government has paid David Dingwall $417,780 in compensation after an independent arbitrator concluded he was forced out of his job as head of the Royal Canadian Mint.

The Privy Council Office announced the payment on Saturday, saying the arbitrator, George Adams, concluded that Dingwall hadn't resigned – as Paul Martin's Liberal government suggested at the time – but had been fired.

"Mr. Adams has concluded that Mr. Dingwall's departure was involuntary and the government has a legal obligation to pay him $417,780, as well as associated pension benefits," the Privy Council Office said in a statement.

David Dingwall, former head of the Royal Canadian Mint. (file photo)

"The binding award of the arbitrator has the force of a court order, and the government has respected the decision."

Dingwall left the Mint in September 2005 amid allegations of overspending after an Access to Information request found that he and his top aides had expenses of more than $740,000 in 2004

The controversy came amid the inquiry into the sponsorship scandal and opposition MPs tried to portray the Dingwall case as sign of Liberal misspending, accusing him of wasting taxpayers' money.

Dingwall in turn accused the opposition of "falsely" characterizing his expenses, saying there wasn't any improper spending by his office while he was president and CEO of the Mint.

One of the most heated debates stemmed from the possibility of a severance package for Dingwall, who left a $277,000-a-year job. When he defended his right to severance with the words "I'm entitled to my entitlements," the opposition pounded on the words, alleging they illustrated Liberal arrogance.

An independent audit by the accounting firm PricewaterhouseCoopers, released in October 2005, found the expenses fell within the Crown corporation's guidelines.

Paul Martin's minority Liberal government said in October that it would pay Dingwall what was legally owed him, but the two sides couldn't agree on an amount. They asked the independent arbitrator to decide whether Dingwall resigned voluntarily and what compensation he should receive.

Tories won't challenge severance package

News of the settlement came only two days before the Conservatives assume power, with Stephen Harper scheduled to take the prime minister's oath on Monday.

Harper accused the Liberals of misleading the public and parliament. "After months of evasive answers in the House of Commons, we have now learned that David Dingwall's departure from the Royal Canadian Mint was involuntary," Harper said in a statement. "This is contrary to the information given by the Liberal government."

His director of communications, William Stairs, told the Canadian Press that he did not expect the new Tory government to challenge the arbitrator's decision.