Hundreds of bomb survivors are suffering from lasting injuries

The Home Office said an extra �2.5m would be available due to the "exceptional nature" of the attacks.

The additional compensation, which could double some victim's payments, will be distributed before the first anniversay of the bombings.

Details of how the money will be awarded will be announced next week.

The attacks by four suicide bombers on three Tube trains and a bus on 7 July last year killed 52 people and injured hundreds.

The government has already paid out more than �2m to victims.

Criticism

The Home Office said as well as specific payments for injuries and death, victims can also receive extra payments for special care and loss of earnings.

But Nader Mozakka, 50, who lost his wife Behnaz in the Russell Square explosion, criticised the latest announcement.

"To give �2.5m between around 500 people that is not going to go very far."

He said he had received �5,500 for the loss of his wife, which was an "insult" to her name.

"The government's seen how other countries - Spain and the Madrid bombings and America with 9/11, how the persons of these tragedies were treated.

"The (July 7) bombing families were treated not nearly the same."

Other victims have previously criticised the compensation system.

Martine Wright, who lost both legs and was awarded �110,000, said her compensation did not even cover her expenses and urged the government to scrap the �500,000 limit for any one victim.

New scheme

The government has proposed changes to the criminal injuries compensation scheme which could see the ceiling on payments lifted.

The criminal compensation "tariff" system was introduced in 1996 and updated in 2001.

It is an exceptional case in my view and I'm considering what might be done exceptionally John Reid, Home Secretary How compensation works

There are 25 levels of awards within the scheme depending on the injuries sustained.

Under the proposed changes to the compensation scheme, those who suffer minor injuries would no longer be eligible for payments, while the focus would be on larger payments for the most seriously injured.

Earlier this month Home Secretary John Reid said the current rules created an "incongruity and an apparent unfairness".

He told the BBC: "The tragedy of 7 July was an exceptional case."