Pension victims will get no extra money says Blair

He clashed with David Cameron in the Commons ahead of a Lords vote where the Government faces possible defeat.

The Prime Minister insisted that existing compensation arrangements, which have so far failed to help some 125,000 pensioners, were adequate.

But the Government's unity was jarred earlier when its own former chairman of the Pensions Commission, Lord Turner, declared that he backed the calls for a more generous system.

Outside Parliament, an elderly man stripped to his boxer shorts in protest at the Government's stance on the issue. There was no sign of a threatened rally of nude pensioners.

The furore centres on 125,000 people who paid into company pension schemes only to see them collapse. Under complex rules set by ministers, some victims have had 90 per cent compensation and others were offered less.

Tory leader Mr Cameron said it was vital to get help now to those who had been let down. "The Government fund set up to support these people has so far only helped just over 1,000 people and yet it's cost £10 million to administer," he said.

Mr Blair said it would be "irresponsible"-to promise financial support without knowing where the money would come from. In a jibe at Mr Cameron's U-turn on grammar schools, he said unfunded promises were "delusional".

The existing fund would pay out at least £8 billion eventually, with claimants getting 80 per cent of what they lost.

He added: "There used to be absolutely nothing for these people at all."

Mr Cameron snapped back that the scheme had only been needed because so many schemes went bust under Labour.

Earlier pensions guru Lord Turner, who clashed with the Chancellor when he was brought in to overhaul the pensions system, backed calls for more government money to bale out victims. He said: "There are groups of people who have been hard done-by and we should find ways to improve the generosity of the Financial Assistance Scheme."

Conservative and Liberal Democrat peers were uniting later in a bid to defeat the Government in the Lords. In April, a similar vote in the Commons was lost by just 22 votes - giving ministers a close shave.

Liberal Democrat pensions spokesman Lord Oakeshott said: "The Government must meet its obligations to 125,000 robbed pensioners."

Conservative Lord Skelmersdale said Mr Brown's decision in 1997 to raid £5 billion a year was to blame for funds closing.