The Government may step in to help those who have lost out when their pension schemes went bust, the Prime Minister hinted today.

Challenged at Commons question time, Mr Blair said ministers were looking at "exactly what the cost implications of helping them would be".

He told Labour's Julie Morgan (Cardiff N) that he hoped to get back to her on the issue "as soon as possible".

The Government is setting up a Pension Protection Fund to protect employees in future who see their pensions disappear when schemes falter.

But the Government has been under mounting pressure from Labour backbenchers and others to help thousands of people who have already lost out.

Mrs Morgan said: "I know you are aware of the plight of Allied Steel and Wire workers who stand to lose up to 90% of their pension entitlement even though many of them have paid in for up to 40 years.

"I know you are aware of their campaign for justice and the campaign in this House led by the MP for Cardiff West (Kevin Brennan). What can you tell me to go back to tell my constituents who paid into that fund. What hope can you give them?"

Mr Blair replied: "We sympathise entirely with the position of the Allied Steel and Wire workers and other workers who are in the position of having paid into a scheme and then found literally all the money they paid in has yielded them absolutely no benefit at the end of that.

"It's precisely to protect against future such situations that we have got the Pension Protection Fund.

"In respect of those that have already lost money, we are looking at the situation now to see exactly what the cost implications of helping them would be. I hope I can come back to you and other Members as soon as possible."