Despite this, about 260 MPs from all parties have signed an Early Day Motion backing financial help for haemophiliacs infected with the virus.
As The Independent first revealed, about 3,100 people were infected during the 1980s when they were given untreated batches of a blood-clotting agent called Factor VIII. It is thought that 60 sufferers have died after being exposed to the virus that causes cirrhosis of the liver and can lead to cancer.
Victims of the treatment claimed that the health service had a moral duty to help them, but after a lengthy consultation process Mr Horam refused to accept the burden. His letter adds: "We do not accept that there has been negligence on the part of the NHS... Tragic though it is that the very treatment designed to help those patients infected, should have caused them harm, there can be no question that they received the best treatment at the time. That treatment was essential for their survival."
The Department of Health is worried that making payments now on the basis of "non-negligent" harm would open the floodgates to many no-fault compensation claims.
The refusal to pay out was condemned by the Society. The chairman, the Rev Prebendary Alan Tanner, said: "It is simply not good enough for the Government to wash its hands of the situation and provide no financial help to those infected with Hepatitis C. We will not let this matter rest... people are suffering and dying as a result of this virus contracted through NHS treatment. We have widespread parliamentary support for our cause and we will vigorously campaign for financial help for those infected and their dependants."
The Haemophilia Society said it sought recompense on compassionate grounds, claiming that compensation should take the form of goodwill payments. They contrasted the Government's handling of them compared with the treatment received by HIV sufferers who were infected after receiving NHS blood. In the HIV cases, money was accepted on the basis that NHS resources for patient care would not be hit by an escalating compensation bill.
Mr Tanner said they also thought Mr Horam was ignoring their call for new and safer treatments for haemophiliacs that could help prevent similar tragedies. "This short-sighted approach from the Government to the provision of the safest treatment, means the possibility still remains of people with haemophilia being infected by blood-borne viruses through their NHS treatment."
The virus, formerly known as non-A or non-B Hepatitis, was only identified at the end of the Eighties. It is thought that between 50 and 80 per cent of people infected will develop serious liver complaints, which, in some cases, will lead to cirrhosis and cancer. There is no vaccine, which means the disease can be passed to other members of a sufferer's household. Studies suggest Interferon Alpha, the only available treatment, is effective only in some cases.