MINISTERS have been accused of a fresh betrayal of lung cancer victims, after secretly slashing the compensation paid by insurance companies.

A much-criticised deal for people diagnosed with mesothelioma – or the families of those who have died – was expected to be funded by a three per cent levy on firms.

It was already under fire because it will pay out only 80 per cent compensation to victims of asbestos exposure with a cancer of the lining of internal organs, typically the lungs.

Mesothelioma can take 40 years to develop, but kills within an average of nine months – with the North-East a blackspot, because asbestos was used in shipbuilding, construction and the car industry.

Now it has been revealed that the levy on insurance companies this year has been quietly cut from three per cent to just 2.2 per cent, a decision not revealed to MPs.

Critics say victims and their families have been denied “more generous pay-outs”, or that the extra cash could have funded more research into the terrible disease.

Andy McDonald, the Middlesbrough MP and a campaigner on the issue, said: “The figure of three per cent was written in stone – they said they would not move away from that.

“It’s appalling, a nasty early Christmas present for mesothelioma sufferers and their families.”

Ian McFall, head of asbestos litigation at Thompsons Solicitors, said: “This scheme has always been the result of a cynical deal which has short-changed mesothelioma claimants.

“By reducing the levy on insurers from a previously agreed rate, the Government has preferred to gift the insurance industry with another financial windfall.”

When the controversy was raised in the Commons, social security minister Mark Harper did not deny that the levy had been slashed, insisting he remained “proud of the scheme”.

But a department for work and pensions (DWP) spokeswoman told The Northern Echo that the levy had been cut to 2.2 per cent only because few people had applied for compensation.

She added: “We are encouraging people to apply and, if we do get more applications, the levy will go back up to three per cent.”

Last month, the DWP said average payouts were £126,000 and were on course to reach £32m this year, for victims unable to trace their employer.

Nearly 2,400 people, mostly men, die from mesothelioma every year. Annually, round 300 people struggle to find a relevant party to sue for damages.

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).