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A "Notices of Motions" extract stated that there was no logical or legal argument for the Government's refusal to extend aid to people without haemophilia.

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Treasury officials described the then current justification for limiting financial support for people who had suffered HIV infection from treatment under the NHS to people with haemophilia as never having been convincing, they urged that there should be no extension.

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The Chief Secretary expressed that he had "serious reservations about whether it would be possible realistically to ring fence any such compensation" and commented that, by "compensating those acquiring HIV from blood transfusion, we will be taking a further long stride towards no-fault compensation in general."

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The Chief Secretary discussed whether it would be possible to ring-fence compensation.

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A letter from Peter Kendall to the Secretary of State explained that that a sum around £12 million could be found from the Departmental Votes in 1992-1993 if Secretary of State saw this demand as an overriding priority.

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A letter commented that the Secretary of State recognised "the difficulty in providing resources from the Reserve which your officials have explained to mine" and that he would "investigate what scope there may be for longer term action on the blood transfusion patients."

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Officials recommended that the Chief Secretary request the return of the £6 million the Secretary of State had said he could contribute to the payment scheme to defray the overpayments to doctors and dentists.

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The Department of Health's public position remained that financial support for those infected with HIV would not be extended beyond people with haemophilia.

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Ahead of a meeting with John Marshall MP, the Prime Minister was provided with a Department of Health briefing.

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William Chapman suggested that the "Government's position seems increasingly untenable".

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The Prime Minister highlighted the risk of a precedent being set which would lead to no-fault compensation, as well the importance of a clear ring-fence, and agreed to consider the matter further.

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The Chief Secretary decided that he "would be willing to agree to Mr Waldegrave proceeding with compensation if it was agreed that no further groups would be given similar treatment; and if Mr Waldegrave found all the necessary funds."

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The Secretary of State wrote to the Prime Minister to make the case for extending financial support to transfusion patients infected with HIV. In doing so, he acknowledged that the Government had to "recognise the risk of weakening our general opposition to no fault compensation" and suggested that it should make plain that it was responding to "very special circumstances". He also addressed a proposed division of funding between the Department and Treasury.

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While the chief secretary reiterated his concern about ring-fencing and moving towards no-fault compensation, he explained that he was "willing to withdraw my objection provided you are able to give a firm assurance that you and your department will be prepared to draw the line at this group and to face up to requests from other groups." He further asked that the Department of Health find the necessary funding without any contribution from the Treasury Reserve.

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Correspondence between the Prime Minister's office, the Department of Health and the Treasury continued on the details and timing of the Government's announcement that it would be extending financial payments.

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A letter from William Chapman to Chris Padwick outlined the Prime Minister's concern over the progress on those people without haemophilia infected with HIV through blood transfusions.

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The Secretary of State responded to the Chief Secretary arguing that "a borderline covering all those infected with HIV by NHS treatment" would be more defensible.

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The Chief Secretary responded accepting the Secretary of State's judgement on the borderline being more defensible, noting that funding would come from within the Department of Health's existing resources.

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A parliamentary question from Sir Michael McNair-Wilson was answered by William Waldegrave, the Health Secretary, with a table showing the amounts of payments to be made.

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Officials sought the Secretary of State's agreement to the outline of a payment scheme.

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