A move by insurers to stop paying out to people diagnosed with a condition showing asbestos exposure has failed.

A High Court judge ruled thousands of people with pleural plaques - scarring on the lung lining - were still entitled to compensation.

But the money they could claim, previously £5-£15,000, was reduced.

Norwich Union, Zurich and British Shipbuilders, who took the case, said the condition did not impair quality of life or lead to more serious diseases.

Insurers Norwich Union and Zurich both said they were considering an appeal, although they welcomed the reduction in the level of damages.

All parties accept pleural plaques rarely cause breathlessness or pain, and only a small proportion of those diagnosed later develop full blown cancer, such as the often fatal mesothelioma.

But lawyers for 10 men whose compensation claims were used as examples in the insurers' case, said the anxiety caused by seeing proof they have been exposed to asbestos deserved compensation.

The judge accepted they had an increased risk of developing other asbestos-related diseases, and that having the plaques caused anxiety.

Between £5,000 and £15,000 has been awarded to tens of thousands of people with pleural plaques since three High Court rulings in the 1980s made the condition "compensatable".

That will now be reduced to about £3,000 for provisional payments, and about £7,000 for full and final settlements.

Those claiming the lower provisional amount have the right to return with a later claim, should they develop a more serious asbestos-related disease.

That right was also protected by Mr Justice Holland's ruling at the High Court in Newcastle.

Read the full story in tomorrow's Northern Echo.