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A minute seeking the approval of the NHS Chief Executive in Scotland recorded that "strong representations" had been received from the infected parties through their solicitors that because the settlement had been in respect of HIV, any undertaking to give effect to that settlement could not properly exclude hepatitis infections.

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A letter from Richard Henderson to J & A Hastie Solicitors referred to the reasons for excluding hepatitis infections from the undertaking.

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John Major accepted William Waldegrave's proposal for a pre-emptive announcement but told the Inquiry that "I did not wish for a backlash that it had been imposed on a take-it-or-leave-it' basis."

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A press release issued by the solicitors making up the plaintiffs' steering committee on the day of the Prime Minister's announcement in 1991 in the House of Commons stated: "These figures reflect the legal hurdles which the Plaintiffs must surmount in their litigation against the Government ... The figures do not represent proper compensation in moral terms for this appalling tragedy - that is not their purpose."

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The Inquiry's Second Interim Report noted the Government had accepted that compensation should be paid and that there was a moral case to do so.

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A letter from Paul Gray to Andrew McKeon recorded that the Prime Minister had agreed to the proposal to allocate a further £20 million to the Macfarlane Trust.

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The increase in non-discretionary payments from £10,000 to £20,000 within an unchanged overall allocation of £20 million was confirmed by the Chief Secretary to the Treasury.

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The terms of reference of the Inquiry required it to consider the "appropriateness of preconditions (including the waiver in the HIV Haemophilia Litigation) imposed on the grant of support from the Trusts and Funds".

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Plaintiffs in the litigation felt that they had no real choice but to accept the settlement. The wife of one of the plaintiffs explained that the Government announced a settlement payment in December 1990 and her husband attended a meeting in London with Mark Mildred of Pannone Napier to discuss the matter. HIV-infected people with haemophilia and all litigants, or at least a commanding majority, had to accept the offer, drop the litigation, and sign a waiver of rights.

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Many plaintiffs felt that they had no choice but to accept the settlement offer and they felt that they had no choice but to sign the waiver. A widow recalled that her husband did not want to sign it but he did not think he could afford to fight on alone, either practically or financially. In the end he gave in.

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Some plaintiffs were not entitled to legal aid and were having to make financial contributions towards the costs of the litigation.

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A compilation of letters outlined rules around the litigation and plaintiffs.

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Whilst claimants experienced relief at the modest sums they received and their protection from costs liabilities, many considered the length of time taken from the beginning of the case to settlement of the claims was excessive and that, if the Government had intended to settle the claims, this could have been achieved in a much faster and less adversarial way.

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Ben James, who was infected with HIV as a result of his treatment with blood products and had become involved in campaigning for compensation, wrote to the Prime Minister, Margaret Thatcher: "No monetary figure can justly be said to equal a life but to remove the financial burden from the victims and their dependents would go some way to enhance the remnants of their lives."

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The CMO expressed the view that "since the emergence of this problem in 1983 the advice given by medical and scientific staff of the Department of Health to Ministers has been both correct and timely bearing in mind the state of knowledge at the time and that there has been no negligence in relation to this advice."

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Memo from Charles Dobson to Mr Alcock regarding the proposed settlement for the Haemophilia/HIV Litigation.

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At a meeting of the Association of Scientific, Technical and Managerial Staffs National Executive Council and Parliamentary Committee it was determined that a new problem had arisen with regards to the importation of blood products and the spread of AIDS.

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A memo enclosed a copy of the line to take in respect of Prime Minister's questions. The line called for a need to balance the risk of AIDS against the obvious risks to people with haemophilia from withdrawing supplies of blood products.

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A memo from Diana Walford to Dr Field discussed the recommendation to withdraw the use of American Factor 8 concentrate due to the risk of transmitting AIDS and noted that Dr Diana Walford thought this recommendation was premature as there was not sufficient evidence to restrict the use of imported Factor 8 concentrates.

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Dr Spence Galbraith wrote a paper entitled "Action on AIDS" which he sent to the DHSS. He had reviewed the literature and came to the conclusion that all blood products made from blood donated in the US after 1978 should be withdrawn from use until the risk of AIDS transmission by these products has been clarified.

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