HAMPSHIRE workers who lost their pensions were today demanding action be taken against a government department that wrongly said they would be in line for compensation.

After celebrating the news this week that they would be line for thousands of pounds of compensation their retirement dreams are once again in tatters - because of a mistake.

The Department for Work and Pensions has admitted that a "departmental drafting error" had meant that a letter incorrectly said that workers for Chandler's Ford APW Electronics would qualify for help from the Financial Assistance Scheme.

Eastleigh MP Mr Huhne, who has been campaigning on behalf of the workers, said: "I am absolutely livid, astonished. How can they take nearly three months to answer my letter then manage to get into a twist with the reply?

"Frankly it seems that the Department for Work and Pensions does not know one part of its anatomy from another. I am in a total state of disbelief and I will be on the phone as soon as the department opens when I hope they will say that APW is covered."

Alan Harwood who worked at the firm for ten years said: "My reaction was one of total disbelief. We were misled over our pensions and now we have been misled over the compensation?"

A DWP spokesman said: "A letter sent to Chris Huhne MP said that the APW Electronics pension scheme has already qualified for assistance from the Financial Assistance Scheme.

"This is incorrect and we would like to apologise to Mr Huhne, and to APW pension scheme members for any misunderstanding or distress caused.

"The mistake was due to a departmental drafting error."

The spokesman added that APW was expected to qualify for the Financial Assistance Scheme, but that had actually not happened yet. The spokesman said the matter was being dealt with as a matter of urgency.

It's a bitter blow for more than half of the 1,259 workers at the firm. Their retirement plans had to be scrapped when a £55m black hole in the company pension scheme caused bosses to close the pension scheme.

The move meant they lost nearly 80 per cent of their pension savings with some members seeing their pension slashed from £20,000 to £4,000.

Under the FAS the hardest-hit workers were due to receive pension top-ups, with the longest serving employees entitled to 80 per cent of their original pension entitlement.