Embattled ferry operator P&O has said it will pay out £36.5m in compensation to workers who were fired last week.

The company said it would amount to the largest ever compensation package in the marine sector.

Pay-outs are linked to the period of service, and in some cases are over £170,000. P&O has said that 575 of the 786 seafarers affected are in discussions to progress with the severance offers.

The move comes as P&O scrambles to respond to business minister Kwasi Kwarteng, who called on the company last week to respond to him by 5pm today.

Sky News reported yesterday that the company was forcing workers to sign gag orders in return for their severance.