The North Western-Health Board's insurance company dictated the the board's legal strategy in the McColgan family abuse case, the Minister for Health, Mr Cowen, said in the Dail.

He told Fine Gael's health spokesman, Mr Alan Shatter, that "in accordance with normal practice there is a clause which gives the sole control and conduct of all claims to the insurer".

That was the information available to him from the Department, he said. "So I understand that it is the insurer who dictated the situation."

Mr Shatter said it was "completely unacceptable that it is an insurance company which dictates the manner in which a State body responds to allegations of gross negligence in their care of children".

He asked if the Minister agreed that the strategy employed could have done nothing other than "add to the stress, strain and hurt suffered by the family and the four individuals in particular who suffered abuse for so many years".

The Minister said he was not in the Dail to defend the strategy employed by the insurers in this case; he was outlining the available facts.

"I wish to ensure in so far as I can that this does not happen again. This is a horrific case and many of the things that happened are unmentionable. There is no question of anyone seeking to understand the behaviour which gave rise to the action." Mr Cowen said he would not deem appropriate "anything that would stop the family getting their just rights".

The Minister said he had set up a group to review the board's involvement and assess its response at the time and the likely level of response today. He expected the group's report in late February or early March.

Mr Cowen expressed sympathy with the McColgan family for the trauma they had suffered as children and he hoped "that no child in this country will ever have to endure the suffering they endured".

He said that monetary compensation "will not compensate them for the loss of their childhood but it is an acknowledgment that compensation was due in this case".

Mr Shatter called for the Minister to introduce legislation to prevent health boards seeking to rely on statutes of limitations or other legal technicalities at the insistence of insurance companies in order to prevent the truth being known as to the manner in which the welfare issue concerning children was addressed by a board at any particular point in time.

Mr Cowen said that to direct boards as a general principle not to invoke the statute of limitations would have an effect on all civil cases, and he would not agree with the deputy on this.

Mr Cowen said that it was "a line of defence that was invoked. I am not suggesting it was justified or appropriate in this case. I am simply saying the decision to do that lay with the insurers."