Lord Morris of Manchester has introduced a bill to compensate the victims of what he has called the "worst ever treatment disaster in the history of the NHS."
The Contaminated Blood (Support for Infected and Bereaved Persons) Bill provides a compensation package for individuals infected by contaminated blood or blood products on the NHS, as well as their widows, carers and relatives.
The package offers free prescriptions, home nursing, counselling and occupational therapy.
The are also provisions in the bill to establish a committee to advise on the treatment of haemophilia and review the support available to those affected.
During the 1970s and early 1980s, nearly 5,000 people were exposed to hepatitis C and of these more than 1,200 were also infected with HIV.
In a heartfelt speech on 11 December 2009, Lord Morris said that the bill will offer "solace and support" to the "small and stricken community of barely 5,000 people already disabled by a rare lifelong blood disorder, requiring continuous medical treatment".
He told peers that nearly 2,000 haemophilia patients have died from infections such as hepatitis C and HIV.
These are "arguably the most needful minority in Britain," he said.
Lord Archer of Sandwell - who headed a two-year inquiry into the affair - told peers that the inquiry "didn't form the impression that patients feel represented or have the ear of government".
"Even the Haemophilia Society doesn't appear to us to perceive the department of health as a committed partner," he added.
Liberal Democrat peer Lord Thomas of Gresford expressed his support for the bill which he said he considered "a matter of justice".
Government spokeswoman Baroness Thornton called it a tragedy and stressed that the government remains fully committed to supporting all of those affected.
"We continue to work to provide ever safer blood and blood products. We are also committed to consulting the haemophilia stakeholders in developing a new policy on the treatment of people with haemophilia," she told peers.
But she voiced doubts as to whether the bill is necessary.