Staff at the ASW plant lost their pensions when it shut in 2002

Pensions Minister Malcolm Wicks has told BBC Wales he did not not want to raise expectations of compensation for the 800 former Allied Steel and Wire (ASW) workers who lost their jobs and pension entitlements when the company collapsed in July 2002.

He reiterated that the Bill published on Thursday - which includes a pensions protection fund - was not retrospective.

But ministers have been urged to pay more urgent attention to the plight of the steel workers.

While welcoming the Bill, Cardiff West MP Kevin Brennan urged Commons leader Peter Hain to recognise the particular plight of the Cardiff workers, many of whom are his constituents and whose problems, he said, were quite distinct from those addresed in the Bill.

Peter Hain said that the government recognised that the ASW workers had been treated appallingly and that ministers were looking at the particular problems involved in the cases.

Meanwhile, pensions expert Dr Ros Altmann, the Governor of the London School of Economics, vowed to fight on to deliver compensation to the ASW staff.

Dr Altmann said it was vital that ASW workers received money, in order to restore widespread confidence in the pensions system.

She said that faith was low because people could see workers were being treated unfairly after being told that the system was safe and protected.

This could end up being a very big challenge in Parliament Dr Ros Altmann

"The principle that taxpayers must fund compensation for flawed legislation must be accepted," she said, adding that she was building a campaign to challenge the Bill and table amendments to it.

"We will have a team in place to make sure we do get compensation funded by the taxpayer.

"This could end up being a very big challenge in Parliament."

The unions which represent the Cardiff workers are already taking the UK Govenment to court for failing to protect their members' pensions.

Describing the ASW workers' sitation as a "tragedy and a scandal", Malcolm Wicks said he wanted to ensure it did not happen again and that he expected "a vigorous debate" in Parliament.

ASW workers are angry that they have lost their pensions

Under the new legislation, a protection fund would be set up to cover schemes that go bust.

Money will be taken from a levy on all pension schemes but Mr Wicks said that, until that fund has been created, there was no money to pay compensation.

"At the moment, we don't have an insurance fund and we don't have therefore have any money coming into it," he said.

"We are looking at all reasonable ideas, but we can't raise false hope about that group."