The families of British victims of Creutzfeldt-Jakob Disease (vCJD), the fatal human form of mad cow disease, are to get initial compensation payments of £25,000.
"Nothing can compensate for the loss of a loved one through this terrible condition but I hope these initial payments to the families of vCJD victims will reduce the financial hardship they may face," Health Secretary Mr Alan Milburn said in a statement.
More than 90 people in Britain have been struck down with variant vCJD, according to official government figures. The disease was first identified in 1996.
There is no treatment or cure for the brain-wasting disease and scientists say that since the incubation period may be as long as 20 years, no one knows how many more people may be harbouring it.
Mr Milburn said the payments would represent the first installment of a wider compensation package for those affected.
Details of the full compensation package are still under consideration, the Department of Health statement said.
The government promised to pay compensation for vCJD victims after a damning report published last October found that officials and ministers from the previous Conservative government had engaged a culture of secrecy that failed to warn the public of the risks of eating beef.
Reuters