An independent review is to take place into the administration of coal health compensation schemes for former miners.
The miners' fund is the world's largest personal injury scheme
Energy Minister Malcolm Wicks announced the probe, saying it would not encroach on an ongoing police investigation into potential fraud under the schemes.
The schemes cover respiratory disease and vibration white finger claims.
Two Union of Democratic Mineworkers' (UDM) officials have stood down while the police investigations continue. The union denies any wrongdoing.
Department of Trade and Industry ministers hope that the head of the review will be announced by the end of July and that conclusions should be available in the autumn.
In a statement the department said the review would consider the "integrity of the administration of the scheme for dealing with coal health claims".
It would also identify any specific measures needed to improve the administration of the scheme and consider whether there are adequate safeguards in place to "prevent, detect and pursue fraud whilst ensuring the fair and timely settlement of claims".
The review will also make any necessary recommendations to ministers and or the Accounting Officer. On 30 June, Mr Wicks gave a statement to the House of Commons about allegations made in the Times newspaper about potential fraud in the handling of coal health compensation claims.
The statement said the DTI was co-operating fully with ongoing police investigations, which are thought to be examining the relationship between the UDM and solicitors' firms. There have so far been no criminal charges brought.
Mr Wicks said at the time that he had not ruled out suspending the UDM contract, while the police investigation continues.
He also stressed there was nothing to suggest there had been fraud against people claiming compensation, nor was the UDM given a "preferential agreement" in handling the cash claims.
"The investigation is focused solely on issues related to the costs of handling claims and not the payment of compensation to claimants," he said.
More than 780,000 applications have been received under both the respiratory disease and vibration white finger schemes.
The DTI is paying out over £2m every working day in compensation, with payments having just reached £2.6bn. It represents the world's biggest personal injury compensation scheme.
In 1997 and 1998 British Coal was found negligent in relation to vibration white finger and respiratory diseases respectively.
The liabilities were subsequently transferred to the DTI under the terms of the Coal Industry Act 1994.
Judges ordered the DTI to work with solicitors representing miners to formulate schemes to handle the payment of compensation.
The detailed schemes were set out in handling agreements signed in January 1999 and September 1999 respectively. These included a fee to solicitors for handling successful claims to avoid claimants having to pay to make a claim.
The Nottinghamshire-based UDM, which has around 1,300 members, broke away from the National Union of Mineworkers during the bitter year-long miners' strike in 1984.