VICTIMS of asbestos exposure and their families will be denied compensation after a Government U-turn condemned as a “disgrace”.

The Queen’s Speech promised a Mesothelioma Bill to provide payouts to sufferers – many now deceased – unable to trace the employer who exposed them to the deadly dust.

The move has long been demanded in the North-East, which, because of its long history of heavy industry, is a known blackspot for asbestos deaths.

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But a trade union immediately warned a £335m fund fell far short of what was originally promised, because:

* Only victims of mesothelioma will be helped – not people dead, or dying, from other asbestos-related conditions.

* Only those diagnosed after July 2012 will receive payouts – denying help to huge numbers of older cases.

* Payouts will be only 70 per cent of the average compensation levels for asbestos, because of a complicated banding system.

Steve Murphy, general secretary of UCATT, said: “Deaths from asbestos are entirely preventable. For decades, Governments and employers knew the risks but chose to do nothing.

“It is disgraceful that even now they are trying wherever possible to deny workers compensation.”

Nearly 2,400 people, mostly men, die from mesothelioma every year – of which 300 do not have an insurer, or that insurer cannot be traced.

Asbestos was used in shipbuilding, construction and the automotive industry, exposing workers. Carpenters, joiners, plumbers and heating engineers are at particular risk.

A ‘standardised mortality ratio’ (SMR) is used to identify blackspots, where a figure of 100 would be the expected number of deaths, given the age of the population.

The figures are far, far higher in Hartlepool (240), Stockton-on-Tees (211), Sunderland (230), South Tyneside (317), Redcar and Cleveland (167) and Middlesbrough (140).

Furthermore, at least 1,500 people die every year nationwide from other asbestos-linked conditions – a figure that could reach 7,500, with better diagnosis, it is argued.

UCATT seized on the revelation that major insurers met Lord Freud, the welfare minister, no fewer than 14 times to discuss the Bill, over two years.

Mr Murphy added: “This watered down scheme demonstrates that the Conservatives are in the pocket of the insurance industry.”

A proposal for a £400m fund – mainly funded by insurers – was put forward by Labour, but progress ground to a halt after the Coalition came to power.

Under the original plan, payouts were promised for all those with fatal asbestos- related conditions with no insurer – not simply mesothelioma cases.

It takes an average of 40 years for inhalation of asbestos dust to cause cancers, which means the records of many insurance policies to protect workers have disappeared.