A historic ruling by the House of Lords means that thousands of asbestos disease sufferers in the North-East will receive compensation.

The court decision could cost insurance companies an estimated £6 to 8 billion.

Five law lords unanimously overturned a Court of Appeal ruling which had denied compensation to victims because they could not prove which of their employers was responsible for their illness.

The asbestos-related disease mesothelioma has affected thousands of shipyard and construction workers in the region.

The judgement followed a three-day House of Lords hearing involving three test cases by the Law Lords headed by Lord Bingham.

It was described by lawyers representing the victims as the most significant decision in the history of industrial disease compensation.

Construction workers union UCATT and lawyers for the widows of two victims of mesothelioma and a sufferer challenged High Court and Court of Appeal rulings that compensation could not be paid in a case where a worker was exposed to the deadly dust by more than one employer.

UCATT leader Goerge Brumwell, a former worker at the William Grange shipyard in Hartlepool was responsible for taking the case to the House of Lords.

He said the judgement would ''teach the insurance industry a lesson it will never forget.''

He added: ''As a former Hartlepool shipyard worker I have seen alot of my friends die.

''This is terrific news now - particularly for the many families in the North-East who have lost husbands, brothers and fathers.

''This is sweet,'' he said, ''This is the winning goal in the last second of extra time - and the whistle's gone.

''There isn't a family in any street in the North-East that isn't affected by the problem of asbestos diseases.''

He added that the judgement was a restoration of hope in the legal system.

The claims involved Judith Fairchild, from Leeds, widow of Arthur, who died from mesothelioma in 1996; 54-year-old sufferer Edwin Matthews, from Rochester, Kent; and Doreen Fox, the widow of Thomas Fox, from Liverpool.

Mrs Fairchild will now receive compensation of around £191,000, while an estimated 500 people whose cases were waiting for today's ruling will now be settled.

Around 5,000 people died in the UK last year of asbestos-related diseases, most from mesothelioma, and the figure is expected to rise to 10,000 by 2010.

North Durham MP Kevan Jones welcomed the judgement. He said: ''This is excellent news for thousands of asbestos victims in the North-East. It rights what was clearly a gross injustice.

''The sad thing is that many hundreds in the North-East will have died waiting for this.''