By Rob Broomby in Berlin

The German cabinet has approved a draft bill that will pave the way for a $5bn compensation package for the victims of wartime slave-labour programmes.

The bill still has to go through parliament, but it begins the process of putting into law the deal agreed last December between lawyers representing the survivors and German businesses.

Under the deal, German companies and the government would split the cost of compensating the thousands of survivors put to work by the Nazis.

But the deal is running into difficulties and could still end up in the courts.

Industry cannot raise the cash - not enough companies have contributed. The fund remains $1.5bn short, despite direct appeals to more than 2,000 firms.

Worked to death

The slave labourers in camps like Auschwitz were integral to the Final Solution and millions of Jews were literally worked to death.

Now the elderly survivors are looking for recompense.

They have calculated the deal offers the average former camp inmate just one deutschmark for every hour they slaved, and they are aggrieved.

Their lawyers have warned that the agreement could still fall apart, forcing the issue back into the courts.

They are angry that Germany wants to subtract from the settlement money paid decades ago to some victims.

More talks

Germany's chief negotiator, Count Otto Lambsdorff, remains optimistic the deal will stick.

But the negotiation of the details will continue.

Lawyers representing the survivors are still hoping to improve the deal in talks in Washington later this month.

The Bundestag has then to give its final approval.

By most optimistic assessments, it will be summer at the earliest before the first cheques are handed over.