Nearly 200 criminals who were forced to stop taking heroin in jail have won payouts from the Prison Service.
A spokeswoman confirmed the Home Office had "reluctantly" settled out of court to save the full cost of defending the case, brought under human rights laws. The development was condemned as a "massive failure" in public protection.
Shadow home secretary David Davis said the case set a "disastrous" precedent and accused Home Secretary John Reid of failing to protect the public. Mr Davis said: "Presumably the Government does not want to be embarrassed by losing such a case under its own human rights legislation."
The Home Office spokeswoman said: "It was decided, however reluctantly, to settle these cases outside of court in order to minimise costs to the taxpayer.
"These cases concern action against medical practice in prison which dates back to the early 1990s."
Six inmates and former inmates who used heroin and other opiates were given the go-ahead to sue the Home Office in a test case earlier this year.
Further details are expected to emerge at the High Court and the Home Office spokeswoman said no information was available about the size of the sums being paid.
The payouts would be awarded to the whole pool of 198 applicants and not just to the six involved in the test case, she added.
The cases alleged the "cold turkey" withdrawal treatment they were forced to undergo amounted to assault.
David Davis added: "Drugs are a scourge on society and completely undermine all our other efforts to fight crime. By doing this Mr Reid would be letting down the taxpayer, the victims of these offenders and the drug addicts themselves. The precedent would be disastrous."
