Fresh Twist in Fight for Marcos Millions

The Philippines yesterday promised to compensate 9,500 human rights victims of the late dictator Ferdinand Marcos with £241m of the assets recovered from the former ruler's Swiss bank accounts.

President Gloria Arroyo's spokesman, Ignacio Bunye, told local media the money would be disbursed as soon as a law was passed permitting the move. Under current legislation all Marcos funds are earmarked for agrarian projects.

"The president recognises that the human rights victims should be indemnified," Mr Bunye told a radio station in the capital, Manila. "That is why the executive department has earmarked the money and the only thing needed is for Congress to pass the legislation."

It is not clear when this might happen since attempts to pass the necessary law have been stymied for years.

Mr Bunye said the money would come from the £367m of Marcos assets the Philippine government was awarded by the supreme court in 2003.

The victims had been hoping to secure all £367m for themselves but on Friday a US appeal court ruled it had no jurisdiction to overturn the Philippine court ruling.

The judges in San Francisco said this was despite a Hawaiian court in 1995 awarding the victims $2bn. Before Friday's verdict President Arroyo was only willing to give the victims £78m. Legal analysts say Friday's verdict effectively ends the victims' 19-year-long court battle for compensation as the US judges' recommendation that they seek recompense through the Philippine courts is unlikely to prove successful.

The victims have so far failed to meet a Philippine court order that they submit a £3.75m bond before any case against the Marcoses can be heard in the Philippines. They launched their quest for money after Mr Marcos was ousted in a people's power uprising in 1986.

The dictator, who had ruled the Philippines for 20 years, fled with his family to Hawaii where he died three years later, which is why the first legal challenge was there.

The money found in the Swiss bank accounts is widely considered to be less than 10% of the total the dictator and his cronies embezzled, but nobody has been able to prove how much the state lost during the regime. Victims' lawyers have also identified £11.8m of alleged Marcos assets in Singapore but the Philippine government is also claiming this.

Mr Marcos's widow, Imelda, who is still a prominent figure in the Philippines, declined to comment yesterday. She has always maintained that the family never stole any money from the state and that the seized money is rightfully hers.

Commentators were speculating last night that the US court decision might make Mrs Marcos feel vindicated and so prompt a legal challenge to recover the £367m.