Ba joined the Hammers in January 2011 from German club Hoffenheim but he was unable to stop his new side from being relegated that season.
That allowed the Senegal striker to invoke a release clause in his contract and he subsequently moved to the Magpies where he has been a revelation, scoring 16 goals to spearhead their push for European qualification.
In an interview with website West Ham Till I Die, Sullivan, who also claimed Ba has a £7 million get-out clause at Newcastle, said: "Demba Ba had a get out if we were relegated. In the end I offered him £45 grand a week to stay but he wouldn't take it.
"It's one of those mistakes that happen, but it's probably one of the worst mistakes I have ever made in my life.
"If he was with us now and his knee held up - because remember he did have a very bad knee - I think we'd be 15 points clear (at the top of the npower Championship), I really do."
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