Auditors could be asked to examine a £420,000 payout made by Kent County Council to its former managing director Katherine Kerswell.

Opposition parties at County Hall say they are considering whether to lodge a formal objection to the authority's accounts in a move that would trigger an external investigation into the payout received by Mrs Kerswell.

Auditors could be asked to issue what is known as a public interest report into the matter if they consider the county council acted unreasonably or irrationally in relation to the payout.

Opposition Labour leader Cllr Gordon Cowan said: "I will certainly be considering an objection. There are a lot of questions unanswered around this issue and quite frankly we deserve to have them answered. The amount of money is a total disgrace."

Liberal Democrat leader Cllr Trudy Dean said she too would weigh up a formal objection and said the subject could also be considered by KCC's watchdog backbench scrutiny committee.

The possibility of a formal complaint and a backbench investigation indicate that the issue of the payoff could continue to come under scrutiny for some time.

Auditors became involved when, in a separate decision, KCC agreed to pay its former chief executive Peter Gilroy a one-off payment of £200,000 for extending his contract by a year.

The auditors' intervention saw KCC acknowledging the payment to Mr Gilroy had actually cost the taxpayer £407,000 once national insurance and tax was added.

There has been a storm of protest over the payout made to Mrs Kerswell, who was in her post for just 18 months before leaving in controversial circumstances last December.

KCC says restrictive employment law meant it was obliged to offer the six-figure payout but that a re-organisation of the authority which has involved a reduction in senior managers means the council is spending £40m less on salaries.

Audit regulations permit anyone to object to a local council's accounts but only during the 20-day period that they are open for public inspection. In KCC's case, the inspection period ends on July 8.

Auditors have powers to declare whether something is unlawful and can issue a public interest report if they rule expenditure is unreasonable.