Victims of the worst contaminated blood scandal in the NHS’s history say they have been betrayed by the Government after plans were revealed to reduce their annual payouts.

About 5,000 people – many of them haemophiliacs – who were infected with HIV, hepatitis C or both after receiving infected blood in the 1970s and 1980s, have been sent letters from the Department of Health asking for their views on “reforms” that will leave them up to £7,000 a year worse off.

The DoH wants to cap annual payments – administered for the Government by the MacFarlane Trust (MFT) – for victims in England at £15,000, which will no longer be index-linked and so will not increase with the cost of living. They also want to remove “regular discretionary” payments, including the winter fuel allowance and the £1,200 per child annual payment.

Victims will also no longer have access to MFT grants for support with such things as mobility issues and modifications to property, nor will they have access to free expert advice.

They are particularly angry because, by contrast, the Scottish government announced last week that it plans to increase financial support.

In Scotland those suffering from advanced hepatitis C infection will now receive £27,000 a year – the equivalent of the average income and almost double the current annual payment of £14,470. Victims with chronic hepatitis C will also now receive a £50,000 lump sum payment, up from £20,000 previously. The widows and widowers of those who have died from hepatitis will receive annual payments for the first time.

Debra Todd, 44, who in 2002 was unknowingly infected with HIV by her then-partner after he received tainted blood as a teenager, condemned the DoH consultation.

“It’s all about money,” she said. “I’ve been living with this nightmare for 13 years. It should have been resolved years ago. I don’t want this ordeal to be going on for yet another decade or two and suddenly it becomes about my children having to fight for justice, like it has been for so many other families affected.

Ms Todd’s partner didn’t tell her about his condition until five years into their relationship, when he fell seriously ill. He also had hepatitis C, which was not passed on to her.

The Government proposals mean that in future anyone in Ms Todd’s position – infected by their spouse or partner where they were aware of their own infection status – will receive no financial support.

She now stands to lose more than £6,000 in payments, almost half of which is for her two young children (both HIV negative) she had with her current partner.

A former self-employed teacher whose business collapsed after she became increasingly ill, Ms Todd said she is speaking up in anger after reading the Government’s plans.

“I’d been alone with this for 13 years,” she told The Independent. “I hadn’t spoken to anyone else about it until very recently. The whole government consultation has dragged me back into this all over again and another complete upheaval in my life. I’m now fighting for my family’s security.”

All payments received so far by government charities have been ex gratia – no compensation has ever been awarded because no government, health or pharmaceutical entity in the UK has ever admitted liability for the scandal. The Irish government paid victims £750,000 each.

David Cameron apologised on behalf of the British Government last year following publication of the Penrose report in Scotland, which exposed how chronic ill health had wrecked the lives of many tainted blood victims and their families.

The Prime Minister said “up to £25m” would be provided in 2015-16 to support any transitional arrangements to a better payments system.