Scottish Secretary Helen Liddell has continued to lambast the insurance industry, for what she claims is its abandonment of asbestos victims after the failure of Chester Street insurers.

Liddell, speaking at the Scottish Trade Union Congress conference in Aberdeen last week, said that “the government is of the view that the insurance industry can't just walk away from this matter”.

She said the Scottish Office had thrown its weight “into getting a result for the asbestos victims suffering because of the collapse of Chester Street”.

She added: “We're in touch with the industry on a regular basis and there are some complex legal issues that are being looked into with some urgency.

“If any evidence of company impropriety is found by the provisional liquidator, we expect it to be reported to the appropriate authorities, and we do not rule out further inquiries.”

Press reports that Liddell also promised full compensation for all those owed money by Chester Street were exaggerations.

Liddell only said the government would ensure compensation would be paid in full “where a public corporation like British Shipbuilders is liable to its employees or former employees”.

However, the Association of British Insurers (ABI) has rejected Liddell's claims that the industry is responsible for the actions of Chester Street.

An ABI spokesman said the industry would not shirk its obligations under the Policyholders Protection Act, but found it unreasonable to expect the policy and shareholders of other insurance companies to shoulder Chester Street's debts.

“We're not in the business of rewriting the statutes and we're not in a position to say we've got a moral obligation to pay,” he said.

A spokeswoman said the Treasury was still in talks with all the stakeholders in the issue, but there had been no change in its stance.