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Tens of thousands of former servicemen, doctors and nurses have been overpaid by more than £100million in their pensions, the Government is to admit.
However ministers will say that they do not want the cash back, in a move which is likely to intensify criticism of the scale of public sector pensions, which are estimated to be £1 trillion in the red.
The mistake was revealed to the House of Commons on Monday by Liberal Democrat MP Vince Cable.
The LibDem treasury spokesman said the error had only just been discovered and he had been asked by the head of the civil service not to publicise it for several days.
In a brief intervention, Chancellor Alistair Darling said the money would not have to be repaid but adjustments would be necessary from next year.
Mr Cable disclosed the error, which he said had been going on for decades, during a debate on the Queen's Speech.
He said he was contacted by a reporter about a company, which pays out public sector pensions to former members of the armed services and NHS.
The company had been wrongly paying pensions to thousands of public sector pensioners. He said: "This error had just been discovered and the company were about to start retrieving the money from the pensioners."
Mr Cable alerted Sir Gus O'Donnell, the head of the civil service, last week who asked him not to make the mistake public for several days.
It is understood that written letters have been sent out overnight from the Cabinet Office to the workers affected by the mistake.
Mr Cable told MPs: "I hope none of us can face the possibility of large numbers of ex-servicemen suddenly being faced with bailiffs turning up and asking them to repay overpayments."
Mr Darling replied: "You were asking about repayments of money that has been overpaid - I'd think it would be better I make it clear that isn't going to happen. It will be necessary to adjust what's paid for the future."
Speaking afterwards, Mr Cable added: "It is critical that the Government comes clean over how long it has known about this problem.
"There must be an immediate investigation into how this could have gone unchecked for so many years.
"The Government must promise not to try and claw back any money from the workers affected."
This week a damning report by the CBI accused ministers of trying to hide the vast cost of looking after state employees in old age, which works out at £32,000 for every taxpayer in Britain.
It also claimed civil servants, teachers and NHS staff were being allowed to retire on unaffordable gold-plated schemes based on their final salaries, far more generous than those earned by workers in the private sector.
However ministers will say that they do not want the cash back, in a move which is likely to intensify criticism of the scale of public sector pensions, which are estimated to be £1 trillion in the red.
The mistake was revealed to the House of Commons on Monday by Liberal Democrat MP Vince Cable.
The LibDem treasury spokesman said the error had only just been discovered and he had been asked by the head of the civil service not to publicise it for several days.
In a brief intervention, Chancellor Alistair Darling said the money would not have to be repaid but adjustments would be necessary from next year.
Mr Cable disclosed the error, which he said had been going on for decades, during a debate on the Queen's Speech.
He said he was contacted by a reporter about a company, which pays out public sector pensions to former members of the armed services and NHS.
The company had been wrongly paying pensions to thousands of public sector pensioners. He said: "This error had just been discovered and the company were about to start retrieving the money from the pensioners."
Mr Cable alerted Sir Gus O'Donnell, the head of the civil service, last week who asked him not to make the mistake public for several days.
It is understood that written letters have been sent out overnight from the Cabinet Office to the workers affected by the mistake.
Mr Cable told MPs: "I hope none of us can face the possibility of large numbers of ex-servicemen suddenly being faced with bailiffs turning up and asking them to repay overpayments."
Mr Darling replied: "You were asking about repayments of money that has been overpaid - I'd think it would be better I make it clear that isn't going to happen. It will be necessary to adjust what's paid for the future."
Speaking afterwards, Mr Cable added: "It is critical that the Government comes clean over how long it has known about this problem.
"There must be an immediate investigation into how this could have gone unchecked for so many years.
"The Government must promise not to try and claw back any money from the workers affected."
This week a damning report by the CBI accused ministers of trying to hide the vast cost of looking after state employees in old age, which works out at £32,000 for every taxpayer in Britain.
It also claimed civil servants, teachers and NHS staff were being allowed to retire on unaffordable gold-plated schemes based on their final salaries, far more generous than those earned by workers in the private sector.
