Posh co-owner Darragh MacAnthony made the revelation during a recent episode of his popular ‘Hard Truth’ podcast.
Posh signed striker Liam Hatch from Barnet for £50k in January 2008 to add firepower to a squad heading to promotion from League Two.
“Barry Fry did the deal with the Barnet chairman Tony Kleanthous,” MacAnthony recalled.
“And part of the deal was a gentleman’s agreement not to play Liam against Barnet.
“But Barry forgot to tell Darren Ferguson so when Barnet played at our place later in the season Liam was on the bench.
“And of course the inevitable happened and Llam came on and scored the winning goal.
“It was a bit embarrassing and Tony understandably went home fuming.”
West Brom manager Sam Allardyce caused a few eyebrows to be raised when admitting his January signing Robert Snodgrass was left out of a game against his former club West Ham because of an agreement between the clubs.
Such an agreement is not allowed under Premier League rules, but Allardyce has not yet been punished.
Hatch started just one game for Posh and scored two goals before he was sold to Darlington in 2011 after several loan spells in the North East and one temporary stay at Luton Town.