Arms-to-Iraq pair welcome payout

Mr Henderson was one of the men wrongly prosecuted

Compensation is to be paid by the Home Office to two businessmen caught up in the arms-to-Iraq affair, it has been confirmed.

Solicitors for former Matrix Churchill directors Paul Henderson and Peter Allen said the ex-gratia payment came under a scheme for miscarriages of justice in a move approved by Home Secretary David Blunkett.

Hopefully, after an award of compensation is made, I will be able to put this matter behind me

Mr Allen

The amount the two men are likely receive has yet to be decided but in two recent comparable cases compensation exceeded £1m.

Mr Henderson and Mr Allen were prosecuted by Customs and Excise in 1992 for the alleged illegal export to Iraq of machine tools for munitions.

The case collapsed nine years ago on Friday when it emerged that the then Conservative government was aware of the exports.

Gratitude

Mr Henderson said: "This is excellent news. I am extremely grateful to the home secretary for his decision to make an ex-gratia payment to me."

He also expressed gratitude to Lord Justice Scott for inquiry into the Matrix Churchill case.

Peter Allen expressed relief

Both men expressed relief that they would soon be able to draw a line under the saga.

"Hopefully, after an award of compensation is made, I will be able to put this matter behind me," said Mr Allen.

Lawrence Kormornick, of Dechert Solicitors, said that his clients were "extremely fortunate" that Mr Blunkett had exercised his discretion in the way he had.

Lucky

"There is no automatic right to compensation from the government for wrongful charge and others may not be as fortunate."

The decision on how much the two men are to receive will be finalised by the Assessor Lord Brennan QC.

A spokeswoman for the home office said that her department could not comment on matters relating to compensation.

The home secretary reserves the right to agree to make ex-gratia payments in the event of there being evidence of a serious default.