Thousands of victims of the infected blood scandal suffered “incredibly bad luck”, former prime minister Sir John Major has said.

To audible gasps from those present at the Infected Blood Inquiry in London, Sir John suggested no amount of money could have offered a true level of compensation for what had happened.

The infection of up to 30,000 people with HIV or hepatitis C from contaminated blood has been called the biggest treatment disaster in the history of the NHS.

Thousands died after contaminated blood products were imported from the US in the 1970s and 1980s, often from prisoners, sex workers and drug addicts who were paid to give their blood.

Sir John was asked about one letter he wrote in November 1987, when he was chief secretary to the Treasury, where he said: “I have to say that, although in terms of equity there might seem to be some gains to be made from a positive response, it would seem to have very real dangers.

“How could such a precedent be ring-fenced? It could lead to an open-ended commitment of huge dimensions.

“Might it not give rise to court action against the Government because of the implication of negligence?

“Have the law offices given a view on the possible consequences of a sympathetic response?

“I do not feel that we can afford to offer such a response until the pros and cons have been thoroughly considered.”

Asked about the letter during the public inquiry, Sir John said he was pointing out that the pros and cons must be considered, including how much compensation should be offered.

He described the effects of the scandal on victims as a “horror”, adding: “There’s no amount of compensation you can give that could actually compensate for what had happened to them.

“What had happened to them was incredibly bad luck – awful – and it was not something that anybody was unsympathetic to.”

Victims have long believed the extent of the contamination scandal was covered up.

In one example suggesting the Government knew the risks, a letter to the Department of Health in 1983 from the Communicable Disease Surveillance Centre in London called for US blood products to be withdrawn over links to HIV that needed examining properly.

Former Labour health secretary Andy Burnham has described the scandal as a “criminal cover-up”.

Clive Smith, chairman of The Haemophilia Society, said in a statement following the comments: “Sir John Major’s evidence today that the suffering and death of more than 3,000 people with haemophilia and other bleeding disorders as a result of contaminated NHS treatment is ‘bad luck’ is both offensive and complacent.

“His evidence is a reminder that successive governments over the last 30 years have refused to accept responsibility for this treatment disaster – and the denial continues.

“Even now, people are still dying of infection contracted in the 1980s and they are dying without justice.

“Those infected and affected by HIV/Aids and hepatitis C caused by NHS-prescribed infected blood and clotting factors continue to fight for accountability, proper recognition of their suffering and compensation.”

Des Collins, senior partner at Collins Solicitors, which represents some victims, said: “Apart from his ‘bad luck’ gaffe, Sir John was actually not without sympathy for victims this morning. Yet his evidence was as measured as you would expect.

“What he did convey was the government in his time clearly understood there was a problem and were anxious to avoid the full cost and ramifications of a negligence action they knew would surely follow.”

Jason Evans, founder of campaign group Factor 8, said: “I don’t think John Major has been particularly forthcoming in his evidence and I suspect families will have a lot more questions.

“His comments about bad luck just fly in the face of all the evidence – expert evidence – we’ve heard.

“I think it just shows how uneducated he is on the matter. There are people in the room, families and victims, who are very angry, annoyed and frustrated with what was said.”

Denise Turton, whose 10-year-old son died after contracting HIV through contaminated blood products, said: “I’m just so angry.

“To say it’s bad luck is horrible to hear, especially after what my son went through. He lost his life, so did many others, and all he says is bad luck.

“I can’t say what I really want to say. The only thing that is bad luck is that the Government didn’t listen.

“They were told about the products and didn’t listen – that’s bad luck, not what happened to my son and so many others.”

Later, Sir John said that if Baroness (Margaret) Thatcher had been presented with an agreed settlement on compensation for infected blood victims she probably would have accepted it.

He said: “People who don’t know Mrs Thatcher assume the legend of Mrs Thatcher is the real Mrs Thatcher. But underneath the legend of the unyielding Iron Lady was someone who often did yield and often did look at things on a human basis to a much greater extent than she is given credit for.

“It may not have been universally true but in my experience it often was.”