The fund will be lodged with the national CJD Surveillance Unit as talks get under way between government and the affected families about future care and compensation packages.

The government will ensure that victims of vCJD and their families will get both care and compensation as rapidly as possible, Mr Milburn insisted.

"My interest is in helping the families affected... without costly, lengthy and uncertain legal action," he said.

I would regard it as pretty perverse if government in this country was able to make compensation available to farmers.. and... not to to families for the loss of their loved ones

Health Secretary Alan Milburn

Talks with the families will begin next week on how the compensation scheme and care packages the government is setting up will operate.

Mr Milburn reiterated his personal apologies to the affected families and insisted that it would be up to them to help determine how the care and compensation schemes work.

Detail

No precise details about the level of compensation to victims are yet available though Mr Milburn said it was likely to "amount to millions of pounds".

"I would regard it as pretty perverse if government in this country was able to make compensation available to farmers for the loss of their cattle, and not to make compensation available to families for the loss of their loved ones, and that's something I am not prepared to contemplate."

Dave Churchill's son died in an old people's home

Mr Milburn said he favoured the idea of a trust fund which would be semi-independent "at arm's lenght from the government" but added that other options are also available which would be discussed with families.

The health secretary said that all families have been allocated a key case worker and that immediate efforts would be made to raise awareness among clinicians about vCJD symptoms so they can spot the disease earlier.

"Very important lessons have been learned today not least about how public health policy is conducted and how risk is minimised," he said.

Gerard Callaghan, whose brother died of vCJD, described the families' experiences of care as "a complete and utter nightmare".

But he, together with other relatives, expressed total confidence that the situation would now be put right, with the will, the expertise and the money available to ensure the best care for vCJD sufferers.

David Churchill, whose son was the first vCJD victim, said his son was unable to even get a wheelchair or an appropriate place to die.

"He was terminally ill and the hospices wouldn't have him so he died in an old people's home," he said.