The Department of Health says it will pay around £80 million over 10 years to the Thalidomide Trust through an annual grant, which dispenses help and support to people disabled by the drug.

This deal secures additional financial support for England’s 325 surviving ‘thalidomiders’, many of whom are unable to work and require adapted homes and cars.

The grant recognises the increasing health needs of Thalidomide survivors as they approach older age and that more investment is needed to help meet the complex health needs that can arise.

The grant, piloted for the last three years, has previously been used to help thalidomiders to alter their houses or other areas of life to improve health and living standards.

This comes just several months after Grunenthal, the manufacturer of the drug, finally apologised for its disastrous side effects nearly 50 years after the cases first came to light.

The German firm, which has now re-worked the drug as a treatment for multiple myeloma, has not however gone as far to pay compensation.

The company sold the drug, primarily used for morning sickness, in the 1950s – but the treatment caused serious birth defects in a number of children, and was withdrawn in 1961.

These defects included missing or deformed limbs and extreme shortening of arms and legs, and malformations of the eyes and ears, genitals, heart, kidneys and digestive tract, as well as many fatalities.

Speaking about the government’s funds the care and support minister Norman Lamb, said: “We wish to express our deep sympathy for the suffering and injury endured by all those affected by the drug Thalidomide.

“This deal represents our clear acknowledgment that thalidomiders should be supported and helped to live as independent lives as possible, and we hope that this grant will aid that cause and provide an element of long term financial security.”

This funding affects Thalidomide survivors living in England only. Separately, the devolved administrations will consider how they will fund a grant for thalidomiders in their areas after the current three year pilot grant ceases at the end of March 2013.

The Thalidomide Trust will report back annually to the Department of Health about how the money is being distributed and controlled. The Department expects the report to also show how the grant is reducing loss of independence and preventing or delaying further damage to health, mobility, and well-being.