A MINERS' union accused of plundering compensation paid to sick ex-pitmen performed a humiliating climbdown yesterday and offered to pay all the money back.

The Durham branch of the National Union of Mineworkers (NUM) is writing to 10,000 members from whom it deducted a "membership" fee of 7.5 per cent.

The union had been fiercely criticised for taking a slice from payouts for compensation claims it passed on to solicitors for its "legal fighting fund".

Some ex-miners had up to £1,000 deducted by the union - even though all legal costs associated with their claims were being met by the Government.

The Action Group for Miners (AGM) campaign group was launched last year to fight for the return of the "missing millions" it said had been wrongly taken by NUM and solicitors.

And, last month, Durham North MP Kevan Jones widened his attack to condemn the £5.56m Durham NUM boasts in assets, including £687,628 in an offshore bank account.

Now the union - which has recently waived the membership fee for anyone who complained - has backed down and offered to repay all the money.

Mr Jones said: "I think it is the right decision. The money should never have been taken in the first place.

"I would urge as many people as possible, who have had anything deducted from their compensation, to come forward and ask for their money back."

However, last night Durham NUM continued to insist it was wrong to compare the union's practices with the deductions made by solicitors and claims' farmers.

David Hopper, NUM general secretary, said: "The union relies on the voluntary contributions from its members to defend miners and their communities.

"In the past, we funded and fought the test cases, which led to these schemes. Now, we are backing claims for miners with knee injuries.

"Government statistics show our solicitors have recovered average damages that are substantially higher than those of other solicitors - so our members are better off in the first place."

In a Commons debate last month, Mr Jones revealed that Durham NUM spent only £1,280 in 12 months on welfare activities and has only 30 full members.

His campaign has made him unpopular in certain circles - he was once condemned from the podium at the Durham Miners' Gala for "selling out the trade union movement".

Mr Hopper has accused Mr Jones of a "vendetta" and challenged him to a public debate.