A hospital trust in Cornwall which is £25m in debt spent £380,000 on legal fees in a battle with its former chief executive over his unfair dismissal.
The Royal Cornwall Hospitals Trust spent £285,451 during a tribunal and £93,148 on an appeal in a legal fight with John Watkinson, it confirmed.
Mr Watkinson was sacked in 2009 over what the trust said was conduct and management concerns.
A tribunal ruled it was because he was planning to act as a "whistleblower".
Mr Watkinson was unfairly dismissed by the trust after voicing fears about moving cancer services out of Cornwall to Devon, the tribunal decided.
'Got rid of'
Mr Watkinson, who spent 35 years working for the NHS, was suspended in October 2008.
He was then dismissed the following April after an independent review said the trust under his stewardship had been "heading towards corporate failure".
Mr Watkinson launched a claim for unfair dismissal.
A two-week employment tribunal last March found in his favour and in its verdict ruled that he had been "got rid of" because he was about to blow the whistle on legal advice over the contentious transfer of specialist cancer services.
The trust accepted it unfairly dismissed Mr Watkinson but appealed against the whistleblower element of the decision and a subsequent £1.2m award.
As a result of a separate hearing, the trust successfully had the payout reduced to £885,000. It is still awaiting a decision on the whistleblower element of the ruling.
The trust said: "It is regrettable that the trust had to spend any money on this case but stands by the decision to try and get a fair outcome."
It has not yet paid the money to Mr Watkinson.
The trust is currently axing hundreds of post as it seeks to save £27m.
A spokesman for public sector union Unison said its staff at the trust would be "absolutely appalled" at the use of public money at a time of cuts.