A PAYOUT of £1.9m is being made to the children of a North-East woman found dead in an American hospital 17 days after she went missing.

Lynne Spalding, 57, originally from Haswell, near Peterlee, County Durham, disappeared whilst a patient at San Francisco General Hospital on September 21 last year.

Her body was later found in a stairwell on October 8 after a flawed search.

Her twin brother Bill dismissed the proposed settlement (about US $3m) as "blood money" and said there were still questions surrounding his sister's death.

Ms Spalding moved several years ago to San Francisco to work in the city's tourism industry.

When she disappeared, the hospital, where she was being treated for a bladder infection, was searched but Sheriff Department deputies did not look in all the stairwells.

One department employee was later sacked and five deputies are awaiting disciplinary action.

Haig Harris, the lawyer representing Ms Spalding's US-born adult children Liam and Simone, submitted a claim stating their mother's death was the result of "reckless neglect of her care and professional negligence by her health care providers."

He said a settlement had been reached with the City and County of San Francisco but final approval was not expected until January.

But Mr Spalding, from Easington Lane, near Sunderland, said: "This is nothing but blood money. There was a systematic failure in the care of my sister by people who didn't do their job properly.

"I'm not letting this drop. I have friends in the US who loved Lynne and who love the city of San Francisco and we want to see people made accountable so this never happens again."

A spokesman for the San Francisco city attorney's office described the agreement as a "fair and just settlement."