THE Government is to pay a £2m shortfall in compensation for many former shipyard workers suffering industrial diseases.

The Department of Trade and Industry (DTI) has announced it will pay the compensation for former employees of companies which belonged to British Shipbuilders following the insolvency of insurance company Chester Street Insurance Holdings, based in London.

The shortfall is also the result of subsidiary companies, which took on the liabilities, ceasing to trade. Payments will be made to former shipyard workers suffering conditions such as asbestos-linked cancers mesothelioma or asbestosis, vibration white finger or loss of hearing caused by exposure to high levels of noise.

Industry Minister Alan Johnson said: "It is the duty of responsible Government to take on this compensation shortfall. This should be another important contribution towards easing the plight of those who have experienced difficulty in pursuing compensation for industrial injuries.

"It was crucial to provide certainty for claimants as soon as possible. We must now all work to ensure that the claimants receive the full amount to which they are entitled."