Hundreds of victims of the Buncefield fire moved closer to an initial payout today after a judge instructed the oil depot's operator to make them a "sensible and generous" offer.

Residents of Hemel Hempstead, in Hertfordshire, who sued for compensation after their homes were damaged or destroyed in Britain's biggest peacetime explosion have asked the court for early payment of damages and a contribution to their legal costs.

Total, the French oil giant, and Hertfordshire Oil Storage Limited (HOSL), which operates the plant, are facing around £700 million in claims relating to the fire in 2005, which injured forty-three people. Total owns 60 per cent of HOSL.

Lexa Hilliard, the lawyer acting for the claimants, told Mr Justice David Steel at the High Court that as the defendants had already accepted responsibility for the blast it was "quite clear the claimants had been successful".

They were therefore entitled to some of the money immediately, she said.

Ms Hilliard added that offers of interim compensation had been made by HOSL but they were "parsimonious" and the issue of legal costs remained a “weeping sore” for the claimants.

That prompted Mr Justice David Steel to direct Total and HOSL to improve their offer. He told both sides to reach a settlement and return to court tomorrow.

If the claimants, many of whom were in court, reject the latest offer, they can then ask the judge to set interim compensation.

Their legal position is strengthened by the defendants' admission earlier in the case that the incident was the result of negligence and was foreseeable.

However, the final amounts that each claimant is entitled to is likely to take some time to determine — prompting the request for an interim payout.

Total has suggested that final compensation should be resolved outside court, through a process of mediation, which would mean the amounts would be negotiated privately rather than set by a judge.

But Ms Hilliard told the judge that the claimants were wary of accepting Total's suggestion given that the oil company "has not exactly covered itself in glory in the way it has treated [the claimants] so far".

The claimants would be free to refuse the offer and proceed with their claims through the courts.

The Hemel Hempstead claimants' battle for compensation has been only one part of the legal dispute surrounding Buncefield.

Much of the trial has been dominated by a fight between Total and its joint-venture partner Chevron, the California-based oil giant, over liability for the bill.

Total claims that Chevron, which holds the remaining 40 per cent in HOSL, should be jointly liable.

However, Chevron argues that it should not have to contribute towards the compensation bill because it was a silent partner and that Total had day-to-day control of the plant.

The explosion occurred in the early hours of the morning on December 11, 2005 after safety measures failed to prevent a petrol tank overflowing. The supervisor on duty at the time did not realise that the tank had overflowed.

The case continues.

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