Karin Pappenheim on the government's annoncement

Campaigners have reacted furiously to the decision that has been eagerly awaited for 10 months since Health Secretary Frank Dobson promised to consider the issue.

At least 90 people have died after contracting hepatitis C from infected NHS blood supplies during treatment in the late 1970s and early 1980s.

However Mr Dobson said payouts were only given to patients where the NHS or individuals working in it were at fault.

Responding to a written question in the House of Commons by Labour MP Vernon Coaker (Gedling), Mr Dobson said that the needs of those infected should be met by state benefits.

Different circumstances

Mr Dobson said the government considered the circumstances of the haemophiliacs infected with hepatitis C different to those infected with HIV.

In 1989 the Conservative government set up a hardship fund to help people infected with HIV and also made across the board ex-gratia payments totally well over £80m.

In response to claims that the scheme should be extended to those infected with hepatitis C, Mr Dobson said: "Our view is the circumstances were different: the stigma around HIV at the time the original decision was taken; the fact that it was generally considered a sexually-transmitted disease and that haemophiliacs could inadvertently infect their partners were all important considerations which do not apply to hepatitis C."

Mr Dobson did announce that the Department of Health is to work with the Haemophilia Society to develop a project aimed at helping young people with haemophilia infected with hepatitis C to understand their condition.

Campaigners devastated

The Chief Executive of the Haemophilia Society, Karin Pappenheim, said she was devastated by the announcement.

"Our hope was that this is a government which has spoken about its commitment to social justice and to the most vulnerable in our society.

"It has come as a very bitter blow indeed to patients who are already suffering from a life long, painful and disabling inherited condition. They are now faced with coping with a virus which ultimately can cause severe illness and death.

"We know this is a case that has justice on its side and we must fight on."

Symbolic protest

Haemophilia Society: 'We are devastated'

Earlier this month, seven haemophiliacs chained themselves to the railings outside the House of Commons in protest at the government's failure to provide compensation.

The symbolic gesture was made by a group of sufferers, their families and MPs as they handed in a petition with 6,000 names, calling on the government to "accept its responsibility" for the tragedy.

Campaigners claimed those similarly infected with the HIV virus have been compensated, but that the situation of haemophiliacs has been ignored.

Thousands infected

It is believed that almost all of the 4,800 people with haemophilia or related bleeding disorders who were treated before 1986 were infected through contaminated blood.

Hepatitis C is the most important cause of chronic hepatitis and liver disease.

Eighty-five% of people with it develop chronic hepatitis. Around 20% develop cirrhosis of the liver. The disease also brings a higher risk of liver cancer.