Former BBC Director-General George Entwistle asked for more than the £450,000 payoff when he left the corporation, Lord Patten said today.
The BBC Trust chairman told MPs that Mr Entwistle wanted more than 12 months' salary to resign - despite being contractually entitled to only half that amount.
Appearing before the Commons Culture, Media and Sport Committee, Lord Patten insisted today the settlement was "better than any other course of action" amid fears of an unfair dismissal claim.
Describing his last phone conversation with Mr Entwistle, Lord Patten said he told him: "We are not urging you to go but we are not urging you to stay".
He said: "I then got a call that evening from him and from the head of human resources, that he wanted to go and wanted to go with 12 months or more".
He went to New Broadcasting House and was told Entwistle would agree to a "consensual termination of his contract", but "would not accept departure on six months and wanted to go on 12 months or more", he said.
Lord Patten added, "£450,000 is one hell of a lot of money.
"The idea that I did not understand how politically difficult it would be suggests a degree of political innocence on my part which I have to tell you does not exist. But the options I had were absolutely clear".
During questioning Lord Patten also became embroiled in a bizarre exchange with Conservative MP Philip Davies which descended into talk of toilet habits.
Davies asked Patten to provide a full itinerary of his daily work – a request that was rejected on the grounds it was “impertinent”.
When Davies pushed again for an answer, Patten went on the offensive.
He said: "I think you're entitled to know how much time I'm spending, I think you're entitled to put down freedom of information requests for how many days I spend in the office, or how many days I spend doing other things.
"But if you think I am going to do a diary for you in order to satisfy some populist pursuit of somebody you didn't want to run an organisation which you don't want to exist, you are kidding yourself.
"Do you want to know my toilet habits? What else do you want to know?"