THOUSANDS of former North-East pitmen struck down by lung disease were last night given fresh hope in their claims for compensation cash.

The Government announced that it had finally reached agreement with solicitors on a £400m package aimed at compensating miners and their widows for a loss of pension earnings.

The lack of an agreement had proved a major stumbling block with a loss of pension earnings forming part of every claim.

Solicitors, MPs and mining campaigners have hailed the deal, brokered by new Energy Minister Peter Hain, and say it should speed up the compensation process substantially.

Mr Hain said that there had been "too many delays in the past with people not seeing the money they deserved quickly enough".

It will mean thousands of claimants can now look forward to full and final compensation offers, rather than interim payments.

Widows of former pitmen will also receive about £30m of the £400m package agreed by the Government.

Last night, North-East solicitor Roger Maddocks, a key figure in negotiations with the Government, said: "This is a major step forward.

"It clears the last legal issue out of the way and will enable us to focus our efforts on ensuring that appropriate arrangements are in place to see compensation delivered as quickly as possible."

Agreement on the loss of pension earnings and how this figure should be calculated had been vital.

Claimants forced to retire early through ill health or demoted to a lesser-paid job were unable to keep up contributions to either the state pension or the mineworkers' pension.

John Cummins, Labour MP for Easington, County Durham, who has campaigned to speed up compensation payments, said: "I am absolutely delighted that Peter Hain has been able to achieve with the solicitors' group a method of releasing that element of compensation relating to pensions."

The Government had been facing a court case in the next fortnight brought by mining union NACODS on the pension issue.

It has also been aware of growing criticism in mining communities over delays in compensating miners ahead of an expected election in the spring.

County Durham campaigner Pat Daglish said: "This is excellent news and can only be of benefit to the miners."