People affected by the drug Thalidomide have agreed a new financial settlement for increased payments in the future.
Diageo, which marketed the drug, and thalidomide campaigners have come to this "full and final" agreement.
Lord Blyth, chairman of Diageo, has also issued an apology for what he called the thalidomide "tragedy".
The agreement will see the total sum available for people affected by Thalidomide rise to around £6.5m a year until 2037.
Thalidomide campaigners welcomed the agreement, which they said would ensure the future of those affected by the drug was financially secure.
"We very much regret the Thalidomide tragedy which happened 44 years ago"
This agreement has been reached between Diageo, the Thalidomide Trust's National Advisory Council, the charitable body that provides ongoing support to thalidomide survivors, and Thalidomide UK.
Thalidomide was originally distributed in the UK under licence by the pharmaceutical subsidiary of the Distillers Company.
It was withdrawn in 1961 when the side effects for pregnant women were discovered.
In 1986, Guinness (a predecessor company of Diageo) acquired the Distillers Company.
Diageo currently makes an annual payment of £2.8m to the Thalidomide Trust.
In 2005, an additional special contribution of £4.4m was made.
The Thalidomide Trust was established in 1973 to provide ongoing support to those affected by the drug. It currently supports 454 surviving thalidomide beneficiaries.
'Spirit of co-operation'
The new agreement means the Thalidomide Trust will be able to increase its annual payments to its beneficiaries, depending on their needs. The average payment in 2004 was £13,000.
"Some of the Thalidomide Trust's beneficiaries are wearing out their bodies at an accelerated rate because of initial damage by the drug and the ways in which they have tried to overcome its effects "
Diageo has also given notice that no further direct individual claims will be considered after 31 December 2006.
Nick Dobrik, deputy chairman of the Trust's NAC, said: "This settlement is tremendously important for all those affected by thalidomide.
"Some of the Thalidomide Trust's beneficiaries are wearing out their bodies at an accelerated rate because of initial damage by the drug and the ways in which they have tried to overcome its effects.
"These extra funds will help them to live with increasing levels of disability as they get older and will ensure that those affected by Thalidomide will have a future that is financially secure."
He praised Diageo for its "spirit of co-operation" in negotiating the agreement.
'Vindicated'
Freddie Astbury, president of Thalidomide UK, added: "After 13 years of campaigning which included a hunger strike to highlight the plight of the thalidomide beneficiaries who were facing an uncertain future due to inadequate trust funds available, Thalidomide UK is extremely pleased and relieved to have finally reached this agreement.
"Diageo is to be commended for its positive approach and recognition of need that has brought about this agreement, and we feel vindicated in respect of the just struggle maintained on behalf of those afflicted so long by this drug."
Lord Blyth, chairman of Diageo plc, said: "'We very much regret the Thalidomide tragedy which happened 44 years ago.
"The suffering and hurt of those affected has troubled us all.
"We are very pleased that this agreement has been reached after a process of very constructive negotiation with the representatives of the thalidomide survivors' community.
"We acknowledge the efforts of all those involved in recent discussions to bring this matter to a mutually agreed conclusion."
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