The widows of two murder victims denied compensation because of their husbands’ paramilitary convictions have taken a giant step towards substantial pay-outs.

The development follows judgments in Belfast’s Court of Appeal in the cases of John McColgan and Mark McNeill, from west Belfast, who were killed in separate incidents.

Their families have been involved in protracted court hearings over compensation, but in a reserved judgment yesterday three judges ruled that the Secretary of State must reconsider his decision to refuse money to Lorraine McColgan and Anne McNeill.

However, in the case of a third widow, Ann-Marie McCallion from Derry, the judges held that the

Secretary of State was under no obligation to give reasons for refusing compensation, and her appeal was dismissed.

In the cases of Mr McColgan and Mr McNeill, compensation was refused by the government on the grounds they had been engaged in the “commission, preparation or instigation of acts of terrorism”.

Mr McColgan, a taxi driver, who was murdered by the LVF at Hannahstown on the outskirts of west Belfast in 1998, had been convicted of possessing explosives and receiv-ed a two-year suspended sentence.

Mr McNeill, who was shot outside a taxi depot at Shaw’s Road in west Belfast in 1998, had been convicted of possessing a firearm and got four months in a Young Offenders Centre.

Derry man Peter McCallion died after a fight in December 1998, des-cribed as a case of “name calling which got out of hand”. He had been jailed for 18 years for his part in an IRA ambush on soldiers.

Lord Justice Nicholson referred to similar cases in which compensation was paid and said there seemed to be no difference between them.

Referring to Mrs McColgan’s case, he said the failure of the Compensation Agency to inform the Secretary of State as to why her claim could be distinguished from others led him to the conclusion there had been inequality of treatment.

“There was a failure to recognise that the information supplied to the minister was inadequate to ensure that he made a decision consistent with the eight other decisions in which he awarded compensation,” the judge said.

Solicitor Peter Madden, who represented all three widows, said afterwards: “While we welcome the Court of Appeal decisions in the cases of Mrs McColgan and Mrs McNeill, we are disappointed that it has dismissed Mrs McCallion’s appeal and will consider with her what options remain.”

A spokesman for the Derry-based Pat Finucane Centre, which supported Mrs McColgan’s case, said: “We welcome the fact that she has won her appeal, but we find it very regrettable that a woman whose husband was murdered had to go to court to get compensation for her children. That beggars belief.”