The Telegraph reports committee chairman Margaret Hodge attacked the Treasury for its “failure to get a grip”. She warned that unless the department “got its act together there was a real risk large numbers of policyholders will miss out”.

Hodge also berated National Savings & Investments, directed by the Treasury to run the compensation scheme, and ATOS, to which NS&I outsourced the work, the report added.

The committee said figures from March this year showed the scheme had paid out £577m to 407,000 people. Hodge said that leaves about 700,000 policyholders still to receive payments worth £370m.

She demanded increased publicity for the scheme – which is due to close in March 2014 – and suggested the government work with policyholders’ lobby group EMAG.