A senior Northern Ireland civil servant was paid £10,000 compensation because he was offended at having to walk past portraits of The Queen and Prince Philip, it has been claimed.

Lee Hegarty, who had been working for the Northern Ireland Office for around 20 years at the time, is said to have cited Human Rights legislation claiming it was unfair for him to have to work in a place where he was offended by such portraits.

The 'scandalous episode' was exposed by former Ulster Unionist party MP Lord Maginnis on Wednesday, as he spoke in the House of Lords during a debate on the Northern Ireland (Executive Formation) Bill.

Lord Maginnis, using the episode to criticise both the Northern Ireland Office and the Conservative Government, also revealed that the portraits had been removed and that one was replaced with a photograph of the Queen shaking hands in Belfast with Martin McGuinness, the late Sinn Féin deputy first minister.

The 'scandalous episode' was exposed by former Ulster Unionist party MP Lord Maginnis on Wednesday, as he spoke in the House of Lords during a debate on the Northern Ireland (Executive Formation) Bill

One of the portraits was replaced with a photograph of the Queen shaking hands in Belfast with Martin McGuinness, the late Sinn Féin deputy first minister

He told the Lords: 'Mr Lee Hegarty was consulted on what should replace them. He suggested that the portrait of the Queen and the Duke of Edinburgh be removed and that photographs of - at best - the Queen meeting people during engagements in Northern Ireland be put in their place.'

Lord Maginnis also revealed that Mr Hegarty had now gone on to secure a position at the Northern Ireland Parades Commission, a body that has angered unionists by banning and redirecting marches.

He noted that he did not mind the use of a picture of the Queen shaking hands with Martin McGuinness, but said he was annoyed that the case had been settled in secret and a sum of £10,000 handed over 'presumably for hurt feelings and distress.'

He added: 'This settlement was signed off by the then secretary of state Theresa Villiers MP on the recommendation, I'm informed, of her parliamentary secretary Jonathan Stevens.

'I've been told to look at the annual accounts to find out where the money came from. But it's not to be found. Something that should concern us.'

Lord Maginnis also revealed that Mr Hegarty had now gone on to secure a position at the Northern Ireland Parades Commission, a body that has angered unionists by banning and redirecting marches

Lord Maginnis claimed the settlement was signed off by the then secretary of state Theresa Villiers MP (pictured)

Lord Maginnis contrasted this alleged payment with the delay in compensating victims of historical institutional abuse in Northern Ireland who have 'been shamefully left out in the cold when it comes to their justifiable claims for compensation'.

The monarchy has long been a sensitive issue in Northern Ireland, more so after its break from the Republic of Ireland around ninety years ago.

Two main sides formed, nationalists or republicans, who are mainly Catholic and who believe the north should join a united, independent Ireland. And the unionists or loyalists, who are often Protestant and who think the north should stay as part of the United Kingdom.

The division of Ireland led to a period known as 'The Troubles' which began in the late 1960s and lasted for nearly 30 years. British troops were sent to Northern Ireland, at first to protect Catholics, but soon became involved in fighting with paramilitary groups.

Thousands died in the ensuing violence, with people on both sides killed by bombs and bullets. Republican groups also launched attacks on the UK mainland.