The National Audit Office (NAO) issued a report last month which claimed that inconsistent and inaccurate data had led to “severe delays” in payments from the scheme and that it ran the risk of “failing to meet payment targets and overrunning on costs”.

However, economic secretary to the Treasury Sajid Javid said in a written ministerial statement today that the scheme is running well.

He said: “As of 30th April 2013 the scheme has made payments totalling £604m and has informed 85% of eligible individual policyholders the value of any payment due.”

He added that the scheme has contacted all eligible individual policyholders it can trace and urged anyone who has not been contacted o get in touch.

“The scheme has also started making payments to those who bought their Equitable Life policy through a company pension scheme, with c.65,000 payments already made to this group. These payments will continue over the coming months,” he said.

“The scheme has also confirmed that the estates of some 8,000 deceased policyholders have been paid and the process of identifying, tracing and contacting the estates of deceased policyholders continues.”

Javid added that the government is “committed to drawing a line under the Equitable Life issue” and that the scheme will begin closing and shutting to new claims later this year.