SURVIVORS of childhood abuse in Scottish care homes are to be given access to a financial compensation scheme.

Deputy First Minister John Swinney made the announcement as he insisted the Scottish Government was “deeply ashamed” of past suffering.

Addressing survivors directly in Holyrood, he said: "We believe you, and we are sorry."

It came as the third phase of the Scottish Child Abuse Inquiry got underway in Edinburgh, examining allegations relating to non-religious and voluntary institutions.

Police said more than 360 people have made complaints of physical and sexual abuse at orphanages run by three voluntary organisations – Quarriers, Barnardo's and Aberlour.

Mr Swinney said survivors aged 70 and over, as well as those approaching the end of their lives through illness, will receive fast-tracked payments from April under the new plans. Provision for this will be made in next year’s Budget.

Meanwhile, legislation to establish the full redress scheme will be passed before the end of the current parliamentary term in 2021, with families of victims who have since died also eligible to apply.

Experts previously said compensating survivors of in-care childhood abuse in Scotland could cost upwards of £200 million. However, with an estimated 5,000-6,000 victims, some have put it as high as £450m.

Mr Swinney said he offered “an unreserved and heartfelt apology to everyone who suffered abuse in care in Scotland”.

He added: "I know that nothing can ever make up for the suffering which survivors have endured.

"Nonetheless, they have told us that redress is an important element of justice and that it would provide some degree of recognition and acknowledgement.

"That is why we will have a redress scheme in Scotland, one which treats survivors with sensitivity and respect."

He continued: "We will move to make advance payments as soon as we possibly can.

"While some months will be required to develop and set up the scheme, we will do so with urgency."

The move follows a series of recommendations from an expert panel, which included abuse survivors.

It called for residential care providers, local authorities and religious orders to contribute to any compensation scheme.

Mr Swinney said he intended to pursue this recommendation “with vigour”.

It is not yet known how much will be given to victims, but the expert panel called for a flat-rate standard payment along with an additional sum which would take account of the severity of the abuse suffered.

Scottish Conservative MSP Liz Smith said her party was “fully supportive of all the victims who suffered appalling abuse whilst in care, and supportive of the Scottish Government as it seeks ways to find appropriate financial redress".

Scottish labour MSP Iain Gray said the promise of compensation was welcome but had taken too long. He called for legislation to be progressed as quickly as possible.

Judith Robertson of the Scottish Human Rights Commission said the scheme would be an “essential component” of justice.

She said: "Anyone subjected to sexual abuse and serious physical or emotional abuse or neglect has a human right to access an effective and fair remedy.

"We welcome that legislation is to be progressed before the end of this parliamentary term, and that advance payments will be made to survivors over 70 and those who are approaching the end of their life through ill-health."

Earlier this month, the Scottish Child Abuse Inquiry found that children in Smyllum Park in Lanark and Bellevue House in Rutherglen – both run by the Daughters of Charity of St Vincent de Paul – were subjected to a catalogue of abuse.