The European Parliament will put pressure on the Government to pay compensation to Equitable Life policyholders, irrespective of the recommendations in the Parliamentary Ombudsman’s report, expected next Thursday.

"In any civilised society, or democracy, where the regulator has failed, people deserve to be compensated for the losses incurred," said MEP Mairead McGuinness, who chaired a committee of inquiry into Equitable last year.

That report concluded that Government regulators did not supervise Equitable Life properly – the same view that the ombudsman, Ann Abraham, is expected to take in her report, which has been seen in draft form by the Daily Telegraph. The newspaper has joined in the campaign for policyholders to be compensated by launching an online petition.

More than a million policyholders lost out when Equitable was forced to close to new business in 2001. Many have since died, while waiting for compensation for lost bonuses.

"People invested mainly in good faith, in essence doing what they should do as good citizens to provide themselves with pensions and ended up being burned financially - not because of their recklessness, but because of what we discovered were responsibilities resting with the regulation in the UK," Ms McGuinness said yesterday.

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