By Jonathan Davies

Tesco has said it could clawback a £1.2 million termination fee paid to former chief executive Philip Clarke, if there is any evidence of misconduct during his time at the company.

Mr Clarke left the supermarket in July 2014 after three years in charge. Two months later, a matter of weeks after Dave Lewis took over, Tesco reported that it had overstated profits by £250m.

The revelation led to an internal investigation and a criminal investigation led by the Serious Fraud Office (SFO).

Tesco says it has "explicitly reserved the company’s rights to pursue recovery of these payments" should new evidence show wrongdoing on the part of Mr Clarke.

The supermarket's annual report shows that Mr Clarke was paid £764,000 last year. But just six months into the job, Dave Lewis has already been paid £4.1m.

Tesco last month announced annual losses of £6.4bn, the worst in UK retail history.