We are ready to directly conclude an agreement

Herb Gray Deputy Prime Minister

Costly legal arguments over compensation have been dragging through the courts for several years.

But now, Canada's Deputy Prime Minister Herb Gray says the government is willing to pay victims with valid claims 70% of the amount they have been seeking.

"We are ready to directly conclude an agreement," he said.

The move is a concession by the Canadian Government, which has previously refused to consider such a large payment.

But some of Canada's Christian churches worry the government's move could be extremely costly for them.

Dark history

The treatment of Indian children in residential schools casts a dark shadow over Canada's recent history.

Thousands of former pupils tell heart-wrenching tales of physical and sexual abuse at the remote boarding schools that attempted to assimilate them into mainstream society.

The indigenous population - involved in many fights against the government

In 1998, more than 8,000 victims have come forward seeking compensation from the churches that ran the schools and the government which funded them.

Of these suits more than 1,000 were settled out of court.

Much of the argument has been between the churches and the government over how to split the settlement costs.

Churches angered

The churches are not part of this announcement and complain it is a unilateral move by the government that breaks off months of negotiation.

It is also one that leaves them a stark choice - pay the remaining 30% of each claim or carry on fighting the cases one by one in court, and it is not yet clear how this will be received by the victims themselves.

For while the offer is by far the government's most generous to date, to claim the compensation, the victims must drop their lawsuits against the government.

For some victims, this is just a small part of a much larger fight against the Canadian government.