A £380 million package has been made available for sufferers who are unable to trace a liable employer or an employers' liability insurer.
Around 3,500 victims of the aggressive asbestos-linked cancer mesothelioma or their families can apply for compensation from next month.
Mesothelioma, which often takes 40 to 50 years to present symptoms after exposure to asbestos, has resulted in over 300 people every year struggling to find a relevant party to sue for damages, because companies become insolvent or insurance records go missing.
Work and pensions minister Mike Penning said, "this will end years of injustice for mesothelioma victims and their families - who have had to endure this terrible disease with little hope of any compensation from the insurance industry.
"We have made it an absolute priority to bring in the scheme as soon as legislation will allow, so I am pleased to announce that victims will be able to apply for payments from next month."
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