The probe into the contaminated blood scandal will be a “full statutory inquiry” and will come under the responsibility of the Cabinet Office after victims and families “expressed strong views” over the potential involvement of the Department of Health, Downing Street said.
Theresa May promised a full-scale probe into the disaster back in July.
Thousands of patients - many of them haemophiliacs - died in the 1970s and 1980s after being given tainted blood infected with hepatitis and HIV. A further 2,500 people survived but still suffer from substantial health issues.
Supplies of the clotting agent Factor VIII were imported from the US, some of which turned out to be infected.
Campaigner Carol Grayson, whose husband Peter Longstaff died in 2005 after treatment for haemophilia left him with hepatitis and HIV, said:” I welcome the news that the Cabinet Office is to lead the public inquiry
“It would have been highly inappropriate for the Department of Health to investigate itself, given the many allegations regarding behaviour and safety violations over the years.
“Now it is important to move forward and appoint a suitable chairperson and panel.”
In a written statement published on Friday, Cabinet Office minister Damian Green said he wanted the investigation to proceed quickly.
“The Cabinet Office has now taken receipt of all the response to the consultation, which it will analyse thoroughly,” he said.
“This work will be completed as quickly as possible, and a further announcement will follow before the end of the year on the setting up of the inquiry.”
Former Lib Dem health minister Norman Lamb said it was good news the government had “bowed to pressure”.
“This is crucial to ensure that the inquiry is completely independent from the Department of Health, whose role in this scandal needs to be fully scrutinised,” he added.
“The imperative now is to rapidly appoint a chair, and finally deliver answers and justice for all those affected by this horrific tragedy.”
Labour’s Diana Johnson MP, who is co-chair of the All-Party Parliamentary Group on haemophilia and contaminated blood, said the prime minister had listened to the “overwhelming and unanimous opposition to this inquiry being led by a department so implicated in this disaster”, but said other urgent commitments needed to be made.
“Firstly, we need clarity that the [Department of Health] involvement will be strictly limited to providing evidence as an implicated party. They cannot be involved in the funding of the inquiry in any way, nor have any say over appointing the chair, panel or setting the terms of reference. Nor can they oversee any response to the consultation on the inquiry.
“Secondly, this statutory inquiry must use its full powers to compel witnesses and hear evidence under oath. It must not be inhibited in its functions by the possibility of criminal liability being inferred. It must be led by a wider panel of experts, alongside a chair.
“Thirdly, the inquiry terms of reference must cover the aftermath of the tragedy as well as the run-up to infection. This includes the allegations of a criminal cover-up on an industrial scale.”
Johnson said the probe must follow a “families first” model similar to that used in the investigation into the Hillsborough disaster, in which 96 Liverpool fans died in 1989.
She added: “They need an inquiry that works with them through a process of truth and reconciliation.
“Provided these commitments are made, we are confident that an inquiry chair can be appointed by the end of this month; and that the thousands of people affected may finally achieve justice for this appalling tragedy.”