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The Secretary of State had considered the introduction of recombinant Factor 8 and by February 1998 it was thought that he would "also be saying 'no to Hep C compensation' at the same time".

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It was "assumed on the hepatitis C 'compensation' issue, given the considerable implications to the wider NHS of agreeing to any such scheme, that you would wish to continue with the policy line which the Government has so far taken in response to representations from other groups ie to refuse such requests".

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There was a draft response to the Haemophilia Society which "tried hard to be as sympathetic as possible in refusing compensation, without repeating too many of the standard arguments which have been put to them on many occasions in the past".

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The reasons for refusing compensation included that "where the ill effects [of treatment] could not have been predicted, or prevented, at the time, then they have to be balanced against the benefits of the treatment."

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In a letter, the Secretary of State addressed recombinant Factor 8 only, saying on the special payment scheme question that he could not yet give an answer.

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A minute was sent to Dr Graham Winyard "expressing concern that while SoS accepts that the Government could not afford a large compensation package, he feels that a small hardship fund like the MacFarlane Trust would be possible. Officials are concerned that significant funds would need to be diverted from patient care to fund it and that Treasury remain fundamentally opposed."

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In response to Frank Dobson's request for a letter to send to the Prime Minister, civil servant Christine Corrigan wrote that there were a number of issues that needed to be determined before the letter could be prepared.

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Dr Winyard told the Inquiry that by "inadvertent", he meant "unintentional" and whatever knowledge and understanding he had of the circumstances in which people were infected would have come from internal Department of Health papers on the subject.

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Dr Winyard stated in a memo to Chris Kelly that it seemed that there were very real dangers in moving from specifics to general policy issues, even more so because the Haemophilia Society was aware of Secretary of State's intention to 'write to No 10'.

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Baroness Jay met officials and asked for a note to send to the Secretary of State. Her clear position was that the Government must hold the line that the HIV decision was the "aberrant" one and that it must resist pressure for compensation.

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In her written statement to the Inquiry, Baroness Jay explained that she had no independent recollection of any meeting with officials, but was sure that she was most strongly influenced by the arguments about creating a no fault compensation scheme and by the formidable logistical and medical problems referred to by officials.

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A note was produced and sent by the Minister of State to Frank Dobson which sought to persuade the Secretary of State against a scheme for people with haemophilia infected with Hepatitis C.

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A handwritten note on a copy of the submission recorded Drs Metters and Winyard's concerns about setting a precedent for no fault compensation in the NHS, and explaining to the people with haemophilia with HIV and Hepatitis C why one and not another was paid.

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Frank Dobson agreed to maintain the existing policy on Hepatitis C payment at a meeting.

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The decision not to set up any form of payment scheme for the "inadvertent harm" of people with haemophilia infected with Hepatitis C was announced in Parliament on the same day.

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Parliamentary Under-Secretary of State in the Lords, Baroness Helene Hayman, was given advice that the Haemophilia Society was challenging each of the points in Frank Dobson's letter through parliamentary questions and correspondence, and requesting a public inquiry.

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In her written statement, Baroness Helene Hayman explained that she clearly felt uneasy about the decision not to introduce a special payment scheme for those infected with Hepatitis C through NHS treatment.

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Baroness Hayman maintained the Government line in Parliament pertaining to no change in policy regarding requests for a public inquiry.

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Charles Lister wrote a memo to Baroness Hayman enclosing a draft letter to Lord Morris reaffirming the Government's position on the special payments question.

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Baroness Hayman wrote a letter to Lord Morris advising him that the Government would not change their position on the special payments question.

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