Allen & Overy (A&O) has become embroiled in a political debate in Northern Ireland following the news that it will receive a £2.5m grant from Invest Northern for launching its 300-staff offshoring centre in Belfast.

The Ulster Unionist Party (UUP) has criticised the regional development agency for promising A&O the grant, after the firm said it intends to pass on as much as possible of the benefit to employees willing to transfer from London to Belfast, rather than taking redundancy.

The UUP argues that the money, which would work out at around £8,000 per person, should benefit people already living in Northern Ireland.

The criticism prompted Northern Ireland enterprise minister Arlene Foster, of the Democratic Unionist Party, to defend A&O's decision on BBC Radio Ulster's Evening Extra, saying the firm could spend the money as it wished.

She told the station: "The cost was not the only reason why A&O came to Belfast, and if they want to use that money in that way, it is entirely up to them."

An Invest NI spokesperson said: "Whether posts are filled by a relocated employee, there is still a wider gain to the economy as the number of people with disposable income who will spend wages locally increases. In addition, the company like many others, will require business services which will benefit other local firms through the supply chain, including office facilities and IT services."

A&O managing partner Wim Dejonghe (pictured) previously told Legal Week he does not expect there to be a significant take-up of London staff wanting to relocate to Belfast, where the firm will launch an operational and legal services support centre expected to employ 300 people by 2014.

A&O is set to begin a formal consultation on proposals to transfer 180 roles from London to Belfast by the autumn – equating to roughly 18% of A&O's total support function in London.

A&O said in a statement: "We are about to enter a period of consultation with our people regarding our proposals as we are legally obliged to under local employment law. Until the consultation is completed we won't know the exact details of the relocation packages. However, we are committed to supporting our people through this transition. We look forward to establishing our new office in Belfast during the autumn and to making a significant contribution to the local economy."

The £2.5m grant is based on the number of job opportunities created in the local market, with top 10 City rival Herbert Smith set to receive £208,000 in financial support towards its Belfast operation, which is set to create 26 jobs and generate total annual salaries of £650,000.