Northern Ireland Water chief Laurence MacKenzie's £96,000 farewell payout should be put on hold, it was has been claimed.
Regional Development Minister Conor Murphy was challenged to withhold the money after it emerged the ousted chief executive swindled his old church in the Scottish Highlands out of £2,000 30 years ago.
Mr MacKenzie, 49, is to be questioned by a committee of investigation in the aftermath of the water leaks fiasco which left tens of thousands of homes without water over Christmas and new year. It has emerged that he was convicted of embezzling the money from West Kirk church, Thurso, Caithness, in 1982.
SDLP MP for South Belfast Alasdair McDonnell said: "The agreed payout of £96,000 to the departing chief executive should be put on hold until the Assembly had an opportunity to fully examine all elements surrounding MacKenzie's appointment and eventual resignation.
"If Mr Murphy knew about Mr MacKenzie's past record in its entirety and still allowed him to be appointed then his judgment has to be questioned. And if he was not made aware by his civil service departmental security checks of the court appearance of Mr MacKenzie then it also raises further questions about just who is running Mr Murphy's department."
Mr MacKenzie stole the money from the church while he worked for the Bank of Scotland as a junior teller. His conviction was confirmed by a Church of Scotland spokesman. It is believed to be spent, meaning that he did not legally have to declare it in job interviews.
One man from the rural Scottish town said: "It was an abuse of trust which is very serious, especially in a small, rural, agriculture community like this where everyone tends to knows everything about the lives of their friends and neighbours."
He resigned last week after 40,000 households in Northern Ireland were left without water over the festive period. The embarrassing episode was triggered after a deep freeze over Christmas ended with a rapid thaw, leading to thousands of burst water pipes.
The Thurso resident added: "A lot of people were hurt by what Laurence did at the time. Most people moved on and maybe one or two wanted to get their own back.
"Once money went missing everybody was under suspicion."