Postmasters dragged through court over missing cash caused by errors in an IT system will only receive an average of £20,000 compensation each.

The Post Office spent up to £120million of taxpayers' cash fighting a two-decade battle – and acted as 'judge, jury and executioner', MPs were told on Tuesday.

Some sub-postmasters accused of stealing money from their own tills were jailed, forced into bankruptcy or hounded out of their jobs.

Set to face questionsL Former boss Paula Vennells had received £2.2m bonuses

In December the Post Office capitulated after a lengthy High Court battle and agreed to pay nearly £58million compensation. But the victims will only receive an average of £20,000 each – from a total pot of £11million – to cover their losses and years of anguish.

The rest of the settlement cash will go on fees to lawyers and the City financiers who funded the claimants.

Even now, some postmasters remain too afraid to admit to shortfalls in their accounts caused by computer glitches, for fear they will be pursued for the money, it was claimed.

Hatherley post office. The Post Office spent up to £120million of taxpayers' cash fighting a two-decade battle – and acted as 'judge, jury and executioner', MPs were told yesterday

The taxpayer-funded Post Office also spent an estimated £32million on lawyers between 2017 and 2019 alone.

Mother left terrified of jail term Former postmistress Wendy Buffrey was yelled and spat at after she was convicted over a £26,000 shortfall in her accounts. The 60-year-old was pressured into pleading guilty to avoid a 'terrifying' prison term and was handed 150 hours of community service in 2010. Yesterday the mother-of-three, who ran a post office in the Cheltenham suburb of Up Hatherley, told MPs the shortfall originally came from around 200 books of stamps that were wrongly recorded on the system. When she tried to correct the ledger, she watched in horror as the system generated an £18,000 loss, which then doubled to £36,000. Former postmistress Wendy Buffrey (pictured) was yelled and spat at after she was convicted over a £26,000 shortfall in her accounts For months she trawled every piece of paperwork to try to explain the accounting error, while maxing out credit cards in an attempt to balance her books. Unable to pay the sum back, her home and her post office business were seized and she had to move in with her son. Her case is now with the Criminal Cases Review Commission. Yesterday she told MPs: 'I cannot explain to anyone the effect being accused of something you haven't done has on you. I'd had five months feeling sick all the time. 'I want someone to be held accountable for what they did to us. We have to find out how, why and who knew.' Advertisement

Alan Bates, founder of the Justice for Sub-postmasters Alliance, yesterday told MPs on the Commons Business Committee that he believed additional costs take the total spent by the Post Office to between £100million and £120million.

He added: 'When you start to talk about dividing £11million between 550 people you can see we are not getting very far to recover the cost. No one is going to be happy with it.

'The Post Office acted as judge, jury and executioner. There was always a presumption of guilt, it was guilty until you're proven innocent.'

Labour MP Rachel Reeves, chairman of the committee, said the postmasters' lives had been left in 'turmoil' because bosses 'looked for an easy scapegoat'.

Some postmasters have been left out of pocket to the tune of hundreds of thousands of pounds.

PM Boris Johnson announced a public inquiry into the scandal last week.

Paula Vennells, who ran the corporation from 2012 to 2019, walked away with £2.2million in bonuses, a CBE for services to the Post Office, and a senior position in the Cabinet Office.

She will face questions from the committee, as will her replacement Nick Read, later this month.

Andy Furey, of the Communications Workers Union, which represents postmasters, said: 'No one has been accountable, no one has lost their job, no one's been dismissed from the Post Office board.

'The scale of this is horrendous. This is a national scandal and the Post Office needs to be held to account.'

More than 50 former postmasters with convictions have lodged cases to get their criminal records struck off.

The Post Office is setting up a new mediation system for postmasters who were not part of the group litigation.

MPs were told the 'floodgates will open' and hundreds will come forward to say they were chased for money.

The CWU said there are still 'daily' issues with the IT system, known as Horizon.

A Post Office spokesman said: 'We are continuing to make further improvements and to re-set our relationship with postmasters.'