The officers retired as part of Lord Patten's scheme to overhaul the Royal Ulster Constabulary and introduce more Catholics to policing following decades of conflict.

Almost a fifth of retirees have been re-employed - four for longer than seven years and others re-employed within three months of leaving.

According to a report by comptroller and auditor general for Northern Ireland Kieran Donnelly, more than £106m has been spent by the PSNI on agency staff since 2004.

The report also questioned the awarding of the contract for recruiting temporary staff to Grafton Recruitment.

The PSNI awarded £44m worth of work without competition and cannot demonstrate that best value was obtained.

Many of those hired have valuable specialist skills in areas like intelligence, built up over years of dealing with paramilitary violence in the region.

However, the PSNI is pledged to promote community policing and has reached out to nationalist communities.

Terry Spence is the chairman of the Police Federation of Northern Ireland which represents rank and file officers.

"There was a collective determination by Government and political parties to portray Northern Ireland as being entirely at peace," he said.

The consequences of this over-eagerness was an under-resourced police service with no choice but to rehire experienced officers.

Terry Spence

The PSNI is dealing with a severe threat from dissident republicans which has caused the deaths of police and soldiers in recent years, as well as numerous security alerts and attacks on the force.

The use of agency staff increased following the Patten report after 2001, when around 5,500 regular and full time reserve officers left the service. The PSNI relied on agency staff to cover skill shortages and vacancies in a variety of policing and non-policing roles.

Many agency staff provided specific policing skills but others did not, including work by former PSNI officers as drivers or English language transcribers.

The PSNI has reduced its reliance on agency staff over the last five years, with numbers decreasing from around 800 in 2007 to 400 by March this year.

Gerry Kelly, the Sinn Féin spokesperson on Policing, said that there is no place for an old boys' network in the new beginning to policing.

"Large numbers retired with handsome severance packages so as to enable the creation of a policing service, which is fully representative of society," the North Belfast MLA said.

Some within the PSNI have been in denial about the implications of retiring and rehiring for the subversion of Patten and public confidence in policing. This needs to end.

Gerry Kelly

The PSNI has welcomed the Audit Office's findings and the recommendations made.

The service said many of the recommendations "are reflective of our current practice."

"The report recognises the clear business need for the PSNI to use temporary staff in an uncertain financial climate, the value for money provided and also the necessity for some of those workers to require previous policing experience," a spokesperson said.

"The report highlights the strength of the arrangements we have in place to manage the use of temporary workers.

"The appropriate place to discuss the detail of the report is with the Policing Board and the Public Accounts Committee and we look forward to having that opportunity in the coming days."

A Policing Board spokesperson said the investigation had "provided a critical review of past policy and practice on the use of Agency staff by PSNI."

"The Report and the findings/recommendations now require careful consideration by both the Board and the PSNI."