Nicola Sturgeon: "A slap in the face"

He said that compensation would be unfair to others affected by conditions after treatment on the NHS.

The Scottish National Party's health spokeswoman Nicola Sturgeon described the decision as "a slap in the face" for sufferers.

"The executive has completely ignored the recommendation of the health committee that those who contracted hepatitis C through defective blood should be compensated in the same way as those who contracted HIV," she said.

"This has simply compounded the injustice already suffered and the SNP will continue to fight for justice for hepatitis C sufferers."

It is estimated that about 500 Scots contracted the liver disease from blood transfusions and blood treatments before screening measures were adopted in the early 1990s.

Malcolm Chisholm: "Utmost sympathy"

The Scottish Executive had refused to offer compensation on the grounds that there was no negligence in the case.

However, a ruling by the High Court in England last year paved the way for compensation payments to 114 victims south of the border.

Following that judgement Mr Chisholm's predecessor, Susan Deacon, said compensation would be paid to those in Scotland who contracted the disease after March 1988 and raised actions under the Consumer Protection Act.

However, those settlements will only apply to about 20 cases.

In October the health committee called for compensation to be paid to all of those who contracted the condition.

'Degree of risk'

Mr Chisholm said he had the "utmost sympathy" with those affected - but claimed that such a move would set a dangerous precedent.

"We have always maintained the principle that the NHS should not pay compensation where there is no legal basis for it being found at fault," he said.

The health minister said there was a degree of risk attached to every drug, treatment, therapy and medical procedure.

"It would not be in the interests of the NHS or, more importantly, patients to create a climate where health professionals withhold beneficial treatment because there is a small chance of an adverse effect," he said.

I can find sympathy under the letter S in the dictionary

Philip Dolan, Scottish Haemophilia Groups Forum

However, Mr Chisholm indicated that the Scottish Executive would enter into dialogue with financial institutions unwilling to give insurance or mortgages to those with hepatitis C.

He also said that an expert panel would be set up to weigh up the possibility of a future compensation scheme.

This group, which will be made up of patients and independent people, will be asked to explore areas where patients have been harmed but the NHS was not at fault.

The commitment to examine ways of providing assistance to haemophiliacs was welcomed by Philip Dolan, the chairman of the Scottish Haemophilia Groups Forum.

Committee recommendations

But he said he was "extremely disappointed" that the recommendations of the parliamentary committee had been ignored.

"One of the main pluses of the Scottish Parliament is that normally the recommendations of one of the committees is usually accepted," he said.

"In a sense, I feel that the remarks from the health minister are somewhat patronising.

"Malcolm Chisholm says he has the utmost sympathy for those affected but it is not sympathy people want, it's justice.

"I can find sympathy under the letter S in the dictionary."