Ministers have met secretly to consider the case for paying compensation to the victims of CJD, the human form of mad cow disease.

Ministers have met secretly to consider the case for paying compensation to the victims of CJD, the human form of mad cow disease.

Alan Milburn, the Health Secretary, and senior officials have taken legal advice about the Government's liability for compensation for the victims, but Government sources are not ruling out "no-fault" compensation to the CJD victims, at a potentially vast cost to the public purse.

Ministers are braced for a public outcry when the Phillips inquiry into the BSE scandal is published at the end of the month. David Body, the lawyer representing many of the victims' families, said their case would be restarted after the publication of the report.

The Independent on Sunday has learned that the Government will resist admitting liability but the move to no-fault compensation could enable the victims and their families to be compensated for their needs without blame having to be established.

There are 84 known cases of the fatal disease so far. About half have dependent children and the families also need urgent help in caring for relatives who are left to cope with long, agonising illnesses.

Ministers were ready to blame the past Tory government for the scandal but now fear that it could open the floodgates to claims running into many millions of pounds.

However, having studied the report, they fear the present government will be held responsible for clearing up the mistakes of the past Tory administration for its mishandling of the BSE crisis.

One source who has read the report said: "It is a very well written report and it is very compelling reading. It names names."

The report contains a chapter spelling out the names of those it criticises for contributing to the tragedy by giving assurances about the safety of beef, which turned out to be false. It names past Tory ministers and officials at the Department of Health and the Ministry of Agriculture, Fisheries and Food including Stephen Dorrell, who will be criticised for being pressed into saying in a radio interview that beef was safe, and John Gummer, who fed his daughter with a burger to show that he believed beef was safe.

Those who have read the report, however, say that it will be difficult for the Government to escape some of the blame for the CJD tragedy, although the failure of smaller abattoirs to enforce stricter standards on offal will be seen as one "let out".

The Health Secretary privately discussed the options with senior officials last week. Agriculture minister Nick Brown and MAFF officials have been resisting compensation claims but Whitehall sources said Mr Brown was sympathetic to the case for paying compensation.

Ministers fear that the compensation demands could spiral if the number of cases continues to rise from the present total of 84 to unexpected levels. "The real problem is we don't know how many could be involved," said a Government source. "It could be 80 cases but what if it was eight million? We just don't know."