The Department for Work and Pensions has been praised for the way it transferred its property portfolio to the private sector.

The National Audit Office said the Whitehall department "succeeded in getting the deal it had set out to achieve" when it transferred its estate under a PFI deal known as "Prime" to a private consortium.

The decision to proceed via a non-competitive negotiation was the correct one, the NAO said.

The statement stands in contrast to previous complaints from the NAO about the way the department procures services and spends public money.

In 1998, the former Department of Social Security transferred its estate to a private sector consortium, now Land Securities Trillium (LST).

Following the 2001 election, and the creation of the Department for Work and Pensions, this contract was expanded by the department to take in property of the Employment Service.

The NAO reported that the department opted to pursue a "non-competitive negotiation" after considering factors including the capacity of the incumbent contractor and their delivery on the original contract.

The spending watchdog praises the department for its commitment to the need to "achieve and demonstrate value for money" in the absence of true competition.

The NAO also concluded that the contract gave the DWP flexibility on the amount of accommodation it pays for in the future, by giving it the scope to buy and sell the right to vacate property.

NAO chief Sir John Bourn added: "The department got what it required at a good price.

"Where public bodies can show that a non-competitive negotiation is the best option, the approach used for the expansion of the Prime contract provides a number of lessons on how to achieve good value for money."