By Lee Carter BBC correspondent in Toronto

The Canadian Government says it is considering an appeal over a provincial court ruling that the country's Anglican Church cannot be held responsible for decades of alleged sexual and physical abuse of native children in boarding schools.

The schools were an attempt to assimilate native children

The alleged abuse took place between 1916 and 1983.

Thousands of former pupils of the schools are taking legal action to gain financial compensation.

The schools were run by the churches on behalf of the Canadian Government.

Dark history

The government is afraid that the ruling will result in it being held liable for all the compensation claims, estimated to cost billions of dollars.

Around a 160,000 native children passed through the so-called residential schools in Canada's far north.

It was the Canadian Government's attempt to assimilate and convert the children.

The schools were mostly dismantled in the 1970s, and they are now largely recognised as a dark and shameful part of the country's recent history.

The Anglican Church, which administered 26 of the schools, said it was facing bankruptcy if the recent lawsuits were successfully pursued.

Legal boomerang

In his ruling last Thursday, the provincial judge in Alberta said there was no evidence of direct involvement in the schools by the general synod or ruling body of the Anglican Church.

He has ruled that only the church's Missionary Society - a separate entity with little money and almost no assets - can be named in the lawsuits.

That places the legal responsibility back onto the Canadian Government.

The minister responsible for the claims, Ralph Goodale, says the government may appeal against the ruling.

"It would almost appear that one would need a higher court assessment of this, if for no other reason than simply to get national consistency," he said.

'Decades of abuse'

Earlier this month, a class action lawsuit was launched on behalf of 91,000 native people who attended the schools, seeking more than US $8 billion from the federal government.

The Anglican Church of Canada says it still wants to pay out fair compensation to the victims.

But as the claims get larger, it remains to be seen what can be defined as fair for what has now been widely recognised as decades of institutionalised abuse.