Around 270 families whose homes were damaged or destroyed in the Buncefield fire will share an initial payout of £320,000 after their lawyers reached an agreement with the plant's operators today.

The families will receive a further £250,000 towards their legal costs to date — although it is not yet certain how the money will be divided between them.

The familes are involved in a wider High Court action in which Total, the French oil giant, and Hertfordshire Oil Storage Limited (HOSL), which operates the fuel storage depot, are facing claims of around £700 million arising from the fire in 2005, which injured 43 people.

Mr Justice David Steel said the payments must be made by December 5. However, the size of the residents' final compensation and which company will foot the bill is yet to be decided.

Total, which owns 60 per cent of HOSL, argues that its joint venture partner, Chevron, which owns the remaining 40 per cent, should share liability.

But Chevron argues that it should not have to contribute to any payout because it was a silent partner and because 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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