Mumbai Attacks: Overseas Terror Victims Could Get £500,000

Attempts to introduce a compensation package for British victims of terrorist attacks overseas are to be stepped up following the massacre in Mumbai.

In the aftermath of last week's atrocities, during which a British businessman was killed, details have emerged of a new funding system to match the maximum £500,000 payout to UK citizens injured in a terror attack on British soil.

The London law firm Lovells said it was entering advanced stages of talks between the government and 10 largest travel insurers to create a compensation system for Britons caught up in terrorist atrocities abroad.

In a Commons debate last month, Tessa Jowell, the minister responsible for humanitarian assistance, acknowledged that the situation was unsatisfactory. 'We must find a solution - and not be prompted only by the next atrocity,' she added.

The government offered assurances two years ago that it was seeking to extend the amount given to UK victims abroad. Trevor Lakin, whose son Jez died in the 2005 Sharm el-Sheikh bombings along with his girlfriend Annalie Vickers, said that the government should stop offering 'excuses' for the delay.

'There appears to be some difficulty in determining what constitutes a violent crime abroad and what is a terrorist incident,' he said. 'But the fact remains that a system where a terrorist victim on British soil receives a certain amount and a victim abroad receives nothing needs rectifying.'

A Lovells spokesman said: 'We are acting as an independent facilitator to forge a deal between the travel insurance industry and the government to provide British citizens who are victims of overseas terrorism with a level of compensation similar to that available if the incident had happened on UK soil.'

Victims seriously injured in the July 2005 London suicide attacks received up to £500,000. Many European countries provide compensation for nationals affected by terrorism, regardless of where in the world they were injured.

Among the overseas terrorist attacks in which Britons have died are the 2002 Bali bombings, when nightclubs full of Western tourists were hit by twin blasts. Twenty-eight Britons were killed in the attacks.

Yesterday Gordon Brown told the Progress Conference in central London: 'A great multi-faithed democracy has been laid low by terrorists. It raises huge questions about how the world addresses violent extremism.'

One survivor, who flew back to Britain yesterday, described how he barricaded himself in his room at the Taj Mahal Palace hotel for 25 hours and hid his passport in his false leg as the terrorists reportedly sought out British and American passport-holders. 'If they'd come to get me, they wouldn't have found a passport,' said Richard Farah, who lives in Trinidad. 'In the last few hours there were so many explosions and the floors shook. I said "I'm a goner", because it was right below me.'

Commandos eventually kicked down his door. As they led him down the stairs, he saw blood on every floor. 'Eventually we got to the lobby. I saw all the blood and broken glass and shrapnel ... tonnes of blood and shoes, people's shoes, women's shoes, men's shoes.'