LONDON, Nov 21 (AFP) - Thousands of people have been infected with a lethal virus after a series of blunders by Britain's health department in the 1970s and 1980s, the Observer newspaper reported Sunday.

The newspaper said it had obtained secret civil service documents showing that successive governments had failed to stop thousands of patients being given blood products contaminated with the hepatitis C virus, which can lead to liver disease and cancer.

It said 110 haemophiliacs died of hepatitis C after being given Factor 8, a blood-clotting product.

Some 1,200 haemophiliacs who contracted HIV through Factor 8 have been awarded a multi-million-pound compensation package, but, the weekly said, those dying of hepatitis C have not received a penny.

"Had the Department of Health listened to medical advice, hundreds of lives may have been saved and thousands more would not have been put at risk," the Observer said.

It said medical experts knew by the mid-1970s that Factor 8 carried a high risk of hepatitis C contamination.

But the health department argued that at the time hepatitis C was thought to be a mild disorder and that the benefits of Factor 8 outweighed the risks.

The first warnings of the severity of the virus were given to officials as early as 1978, the weekly reported, and ministers were warned in 1980.

Eric Preston, a leading expert on haemophilia -- a condition which impairs normal blood clotting and means sufferers are at risk of bleeding to death from even minor cuts -- said ministers should have responded by ordering changes to the product or giving patients the choice of an alternative.

Lawyers acting for the victims claim the health department also starved the British laboratory producing blood products of vital funds.

The Observer said despite warnings, it took ministers five years to ensure haemophiliacs were being given hepatitis-free blood.

The national Haemophilia Society will this week launch a campaign to demand justice for victims.

The revelation is likely to worry former ministers.

In France, senior members of the socialist government of the mid-1980s faced court action earlier this year over similar allegations linked to AIDS-tainted blood and blood products.

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