MSPs have voted against a public inquiry into the contamination of blood products in the 1980s.
Families want answers over the use of contaminated blood
Deputy Health Minister Lewis Macdonald told MSPs a public inquiry would add nothing to the inquiries already held.
Mr Macdonald revealed that 640 patients in Scotland who were infected with hepatitis C had been paid a total of £12m in compensation.
The Socialists and the SNP said only a public inquiry would establish who knew what and when about the affair.
But the minister said the science of hepatitis C and the blood product, Factor 8, was not fully understood until 1989.
He denied the NHS was at fault or that patients had not been informed of the risk.
MSPs agreed that a public inquiry would serve no useful purpose, voting 76 to 16 with 21 abstentions.
Mr Macdonald announced that 640 hepatitis C patients in Scotland had been paid an average of £18,000 each in no-fault compensation.
Hepatitis C is a life-threatening condition which can lead to liver cancer.
Support groups for victims have spent many years calling for a public inquiry and compensation.
Two years ago, the Scottish Executive led the UK in agreeing to make compassionate payments of up to £40,000.
But patients described the sum on offer as derisory and said their fight for answers through an open inquiry would continue.