Speaking out after BBC Spotlight's investigation into possible Libyan compensation to IRA victims, TUV leader Jim Allister described as "disturbing" any suggestion that money could be allocated to all "victims".

He said that, as defined by the 2006 Victims and Survivors Order, those who were killed while engaged in terrorism were in the same category as innocent victims.

"Any attempt by terrorists or their families to piggyback on the tremendous work done by innocent victims to get compensation from Libya should likewise be steadfastly resisted," he said.

Families Acting for Innocent Relatives spokesman, Willie Frazer, whose group launched the action against Libya, added: "We are not going to stand by and let terrorists benefit from this."

He added: "But if someone, a former paramilitary, comes forward and says they no longer support violence publicly and prove they were a victim, this will be something for someone else to sort out.

"People who support violence cannot be rewarded. But there is no saying that even if they do repent that they will get compensation."

DUP MP Jeffrey Donaldson, who plans to fly to Libya to discuss the compensation claim, insisted that terrorists would not receive such money.

He said: "It would be absurd for the perpetrators of violence and the people who used the weapons supplied from Libya to benefit from this compensation."

There was, he said, "not a possibility of this happening".

Mr Donaldson did not specify how much money victims were seeking, but said they wanted to reach a multi-million pound settlement.

"We're still in discussions with the Libyans so none of this is settled," he said.

"The idea that's emerging is that if there was a settlement then obviously those victims who have taken legal action against the Libyan government would be the first to benefit from any settlement.

"We would then hope that would be widened out to include generally victims of IRA terrorism.

"There's a third category which would involve establishing a fund to promote peace and reconciliation in Northern Ireland."

Last night a Foreign Office spokesman said successive Governments have tried to secure compensation from Libya for the victims of IRA terrorism.

"Libya has told us that it considers this matter closed.