The awards were made after the Home Office “reluctantly” settled out of court a test case brought by six inmates.

The payouts will go to 198 applicants and not just the six involved in the test case who alleged that “cold turkey” withdrawal treatment forced upon them amounted to assault.

The Home Office defended the decision to settle the case out of court, which was taken on the advice of Government lawyers who warned that the Prison Service was likely to lose.

A Home Office spokeswoman said: “It was decided, however reluctantly, to settle these cases in order to minimise costs to the taxpayer.

“These cases concern action against medical practice in prison which dates back to the early 1990s.”

Six inmates and former inmates who used heroin and other opiates were granted leave to sue the Home Office in a test case this year. They alleged that the “cold turkey” withdrawal they were forced to undergo amounted to assault.

David Davis, the Shadow Home Secretary, said the case set a disastrous precedent and accused John Reid, the Home Secretary, of failing to protect the public.

Mr Davis said: “Presumably the Government does not want to be embarrassed by losing such a case under its own human rights legislation.

“Drugs are a scourge on society and completely undermine all our other efforts to fight crime. By doing this Mr Reid would be letting down the taxpayer, the victims of these offenders and the drug addicts themselves. The precedent would be disastrous.”

Ann Widdecombe, the Tory former Prisons Minister, said: “It is an insult to every victim and every law-abiding person.

“As far as I’m concerned there is no human right to continue a drug habit when you go to prison. This Prison Service will be paying out money it should not be.”

The prisoners were bringing the action based on trespass, because they say that they did not consent to the treatment, and for alleged clinical negligence.

The criminals also claimed breaches under Articles 3 and 14 of the European Convention on Human Rights, which ban discrimination, torture or inhuman or degrading treatment or punishment, and Article 8, which enshrines the right to respect for private life.

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