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Ed Balls has defended his role in the removal of Sharon Shoesmith after the death of Peter Connolly, insisting he would "do the same thing again".
Mr Balls, who was Children's Secretary at the time, removed Ms Shoesmith from her role after a damning report on the death of Peter Connelly.
Balls, who is now the shadow chancellor, said: "I made the decision to remove the person who had failed, I did so in the best interests of children across the country. Faced with the same situation I would do the same thing again."
The Labour MP earlier said the payout to Sharon Shoesmith left "a bad taste in the mouth".
Eric Pickles said Haringey Council is "bankrolling a state-sponsored cover-up" in its payout to Sharon Shoesmith.
The Communities and Local Government Secretary said there should be no rewards for failure in the public or the private sector.
Former child protection boss Sharon Shoesmith posted a statement online saying she wants to resume work with children, according to BBC Radio 4's World at One.
The statement read: "A final farewell to Haringey as my case concludes. I wish those of you in children's services, especially in Haringey, success, strength and courage in all that you do.
"Children have been my life's work and I hope to continue in some capacity soon now that my PhD is almost complete."
Downing Street has said that the Department for Education's contribution to Sharon Shoesmith's payout will be made public.
The payout to Sharon Shoesmith over her unfair dismissal following the Baby P tragedy "leaves a bad taste in the mouth", former children's secretary Ed Balls told BBC Radio 5 Live .
Time Loughton, the Conservative former children's minister, told the BBC Radio 4 Today programme that Sharon Shoesmith's payout was "effectively rewarding failure".
Conservative MP Charlotte Leslie, a member of the Commons education select committee said, Sharon Shoesmith should "demonstrate personal responsibility" following the Baby P tragedy.
The MP told Newsnight, "A blame culture is not the same as a culture in which people take responsibility and accountability."
Ms Shoesmith's lawyers argued that she was the victim of ''a flagrant breach of natural justice'' fuelled by a media witch-hunt.
Former child protection boss Sharon Shoesmith is set to receive a six-figure payout for being unfairly dismissed following the Baby P tragedy, according to BBC 2's Newsnight.
A settlement which could reach up to £600,000 has been agreed, although Ms Shoesmith may receive a lower sum, the programme reported, stating that some of the money will come from central Government.
Ed Balls, while Education Secretary, removed Ms Shoesmith from her £133,000-a-year post as Haringey Council's director of children's services after a damning report on the death of Peter Connolly, known as Baby P.
She was then fired by the north London council without compensation in December 2008, after a report from regulator Ofsted exposed how her department had failed to protect 17-month-old boy.
Latest ITV News reports
Former child protection boss Sharon Shoesmith is set to receive a six-figure payout for being unfairly dismissed following the Baby P case.