London, England (CNN) -- The British government has apologized and offered compensation to hundreds of people who suffered the effects of thalidomide, a drug once prescribed to pregnant women that later was linked to major birth defects.

Thalidomide sufferers and campaigners hailed the move and said it was long overdue.

British doctors prescribed thalidomide for expectant mothers from 1958 to 1962 to control the symptoms of morning sickness. The drug, developed by a German firm, was used internationally as a sedative and hailed because overdose simply caused prolonged sleep, not death.

Thalidomide also was combined with other drugs to create medications for asthma, hypertension, and migraine, according to the Thalidomide Trust, which supports victims.

Doctors and scientists began to notice gross limb malformations in infants starting in 1960, and scientists linked it to thalidomide the next year. By then, it had affected babies from Kenya to Peru to Japan, though most of the cases were in Germany, where the drug had been available over the counter.

There are currently 466 people in the United Kingdom whose mothers took the drug when they were in the womb. Most of them have two or four limbs missing, and some also can't see or hear, according to the trust.

One of them is Louise Medus-Mansell, who was born in 1962 with no arms or legs.

"It is a bonus, something that we didn't think would ever happen," she told CNN about the government's apology. "There's a lot of people today that have been waiting for this apology from the government that have had partners die."

Medus-Mansell, who recently had a kidney transplant, published an autobiography this year titled "No Hand to Hold and No Legs to Dance On."

Health Minister Mike O'Brien said the British government is creating a £20 million ($32.5 million) fund over three years to meet the health needs of Thalidomide victims, who are between 45 and 51 years old. The money will be distributed by the Thalidomide Trust, he said, and will help reduce further degeneration of their health as the victims grow older.

"The government wishes to express its sincere regret and deep sympathy for the injury and suffering endured by all those affected when expectant mothers took the drug thalidomide between 1958 and 1961," O'Brien said in the House of Commons.

"We acknowledge both the physical hardship and the emotional difficulties that have faced both the children affected and their families as a result of this drug, and the challenges that many continue to endure, often on a daily basis."

The problems caused by the drug led the British government to review the marketing, testing, and regulation of drugs, O'Brien said. That included the enactment of the Medicines Act 1968, which introduced more testing for medicines prior to licensing to make sure they meet safety standards.

The Thalidomide Society, which was created in 1962 by the parents of thalidomide victims, said it welcomed the government's apology.

"I think it obviously makes a great deal of difference (to the children), but I think also for the parents who had dreadful, dreadful trouble in the very early years to convince people that something had happened and it wasn't their fault," said society secretary Vivien Kerr. "For them, I think, it's something to be very grateful for and it's welcome."

CNN's Phil Black and Melissa Gray contributed to this report.