Time Loughton, the Conservative former children's minister, told the BBC Radio 4 Today programme that Sharon Shoesmith's payout was "effectively rewarding failure".
When you are appointed a director of children's services - this is the whole point of the reforms after Victoria Climbie, which again happened in Haringey - is that the buck has to stop somewhere and someone has to take responsibility.
You don't expect that person accepting responsibility, reluctantly in this case, to get a very large cheque on the back of it as well.
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.
Baby P's mother Tracey Connelly was given a so-called imprisonment for public protection (IPP) sentence, which carries a minimum term.
An IPP sentence prisoner is eligible to be considered for release by the Parole Board when the minimum term is served.
When making its decision, the Parole Board will take into account the nature of the offence, the prisoner's offending history, the prisoner's progress in prison and any statements made on behalf of the victim.
Reports from psychologists, probation officers and prison officers are also taken into account.
Connelly will remain on licence for the rest of her life and if she breaches any of the conditions, she will likely be recalled to custody.
A statement from the Parole Board has said that Secretary of State will make arrangements for the release of the mother of Baby P in due course.
We can confirm that a three-member panel of the board has directed the release of Tracey Connelly.
Tracey Connelly first became eligible for parole in August 2012, and at that time a Parole Board panel made no recommendation to release.
This is the second parole review for Tracey Connelly. The decision to release is a matter for the board, which is independent - arrangements and the date of the release are a matter for the Secretary of State.
The mother of Baby P Tracey Connelly is to be released from prison, the Parole Board has confirmed. Connelly was jailed indefinitely with a minimum of five years in May 2009 for causing or allowing her son Peter's death.
The Parole Board has recommended her release from prison following a second review of her case.
The Parole Board said today it has directed the release of the mother of Baby P, Tracey Connelly, who was jailed indefinitely with a minimum of five years in May 2009 for causing or allowing her son's death.