Diageo has agreed on an anticipated final and increased GBP150m (US$263m) settlement to the Thalidomide Trust - to help people suffering from the side effects of the drug - until 2037.

Thalidomide was taken off the shelves in 1961 because it caused side effects for pregnant women and left many babies with deformities, including stunted arms and legs.

The final agreement - to pay around GBP6.5m per annum until 2037 instead of GBP2.8m until 2022 - has been settled between Diageo, the Thalidomide Trust and Thalidomide UK.

Diageo spokesperson Jennifer Crowl told just-drinks: "The most important thing is all the groups involved have signed a full and fair agreement, we have increased the amount of support and the terms of financial payment for victims."

Diageo's responsibility to support Thalidomide sufferers is due to past business links with the UK pharmaceuticals division of the Distillers Company which produced the drug in the 1960s. Distillers merged with Guinness in 1986 before the Diageo merger in 1997.

The trust was set up in 1973, following an individual claim brought against the Distillers Company, ending in an out-of-court settlement.

As part of the new agreement Diageo will not payout further direct individual claims against Distillers or Diageo beyond 31 December 2006.