An outrageous pay-off of €740,000 ($1m) to a resigned charity boss with money funded by the public has prompted government ministers to call for some of it to be repaid.

There is huge public anger across Ireland over the golden handshake that Paul Kiely received last year when he resigned as Chief Executive of the Central Remedial Clinic (CRC), which provides a range of specialized services for children and adults with physical disabilities.

When the controversy over massive top-up in payments for executives in the charity sector first arose in December the investigating Dail (Parliament) Public Accounts Committee (PAC) was told Kiely had a €242,000 ($330,000) annual salary partly propped up by donations from the public.

The PAC only discovered last week that his pension package included a €200,000 tax-free lump sum and a further €273,336 taxable payment.

Demands for him to return some of the money have been led by government ministers, including Tourism Minister Leo Varadkar, who said those in receipt of large pay-offs from public bodies frequently had employment law backing their position and their entitlements.

“I don’t think this is just a matter of law. It is also a matter of principle,” Varadkar said.

“I know it has been suggested that the person in question might pay back some of the money he was given, as a gesture really, to show understanding of how upset people are. I think it would be appropriate.”

Varadkar’s comments followed a call from Minister for Health James Reilly for Kiely to return some money.

Minister for Finance Michael Noonan said that “on the face of it” he would agree that money should be repaid.

The PAC said it aims to call members of the CRC board to give evidence on why they agreed to the €740,000 package.

Hamilton Goulding, whose mother Lady Valerie Goulding founded the CRC, claimed the golden handshake, funded by public donations, was money well spent – and saved about €1.4 million in wages in the long run.

Goulding, a former chairman of the CRC, said he’d be “astonished” if anything illegal led to Kiely’s €740,000 payoff.

He added that Kiely is “quite ill with the stresses and strains” of the scandal.

Retired Army Captain Tom Clonan, a security analyst who has an 11-year-old son, Eoghan, using CRC clinic facilities, hit out at the Kiely payout.

He responded to a Twitter user’s comments about the defense of the payout as “interesting” by saying, “Not as interesting, however, as contractures on my little boy’s legs.”

He also wrote in The Irish Times, “I defy the board of the CRC to explain its obscene behavior to Eoghan.

“Oh, and in the meantime, give the money back.”