Lincolnshire Health Authority was immediately accused by a lawyer representing one family of putting extra emotional pressure on parents who have already suffered terribly from Allitt's activities.
In 1991, Allitt, who was 24 at the time, murdered four children and attacked another nine while working as a nurse on ward four at Grantham and Kesteven General Hospital in Lincolnshire. Two years later she was given 13 life sentences at Nottingham Crown Court.
Parents have been threatening court action to get compensation for post- traumatic stress disorder after suffering nightmares and flashbacks. Now they will have to consider whether to accept the health authority's offer instead, and work out how the money should be divided up between them.
The offer was criticised by Paul Paxton, solicitor for Peter and Susan Phillips, whose twin daughters were attacked. Nine-week-old Becky was murdered by Allitt, while her sister Katy, now aged five, was left with permanent brain damage.
Mr Paxton said: "A scheme has been put forward whereby there will be a pot of half-a-million pounds from which compensation will be paid to the families affected. There is not any breakdown as to how any individual damages will be awarded and all the families must sign up to the agreement before the money is paid out.
"The real concern is that the parents who have got better claims are under a lot of emotional pressure to sign up for the agreement otherwise other families will suffer.
"My clients are very concerned that after all these years they are faced with having to make a decision within 14 days. They are also concerned that there is not sufficient money being put forward."
Mr Phillips said: "Becky died in my arms. It has been a terrible ordeal and we have to consider putting up with more trauma and stress because of Katy's condition."
He said that the money was not enough and added: "I don't think you ever get over losing a child and having a child crippled for life. It is always there. You learn to live with it. At times it is extremely painful still."
Jane Crofts, spokeswoman for the authority, which has not admitted liability, said: "We hope everybody will try and put this behind them as quickly as possible."
The offer does not affect compensation claims from the injured children.Reuse content