Thalidomide victims began a campaign to win €4 billion (£3.2 billion) compensation yesterday, 50 years after they were damaged by the drug.

Survivors from around the world marched on the German Embassy in Belgravia in what they described as a moral crusade. An estimated 3,500 victims are still alive today.

British victims have reached a settlement and have no complaints against Distillers (now Diageo), the UK licensee of the sleeping pill that caused around 10,000 babies to be born with deformities between 1957 and 1962.

But in Germany, where the drug was created, victims get a maximum of £4,000 a year compared with an average of £18,000 in Britain. In Italy, Spain and Austria, the “thalidomiders” get nothing at all, according to Nicholas Dobrik, the chairman of the new International Contergan Thalidomide Alliance (ICTA). “It’s not right, it’s not proper, and we will not rest until we find a solution,” he said.

In Germany the issue was settled in the 1970s with the establishment of a foundation to pay compensation to victims and a law preventing any further claims. The ICTA says that this deal was struck with parents exhausted by the task of caring for their damaged children, and assumed that the thalidomiders would not live long. Today, thousands are still alive, aged around 50, the parents who cared for them are dying, and they regard the settlement as derisory. At a press conference yesterday, there were repeated condemnations of Grünenthal, the German drug company that made thalidomide.

The German Government has recently agreed to double the maximum sum to which a thalidomider is entitled to about £8,000.

Grünenthal said yesterday that it did not acknowledge any basis for the ICTA’s demands. Sebastian Wirtz, the leading member of the family that runs the company, added: “It is unacceptable to join discussions with an organisation that for the past several months has aggressively attacked and tried to damage our company.”

In February the company said that it had decided to make voluntary contributions to improve the quality of life for thalidomide victims and was supporting the German Government’s plan to double payments. ICTA says that it has no desire to damage the company, said to be worth £2 billion. But Germany has a special responsibility, said Claudia Schmidt-Herterich, a German victim.

“To me it is unimaginable that a company would continue trading under the same name after killing 5,000 babies and damaging many more,” she said.

José Requelme from Spain added that some victims in his country had been forced to beg. The situation was “an absolute disgrace,” he said.

Costly mistake

— 1957 Thalidomide (contergan) marketed as treatment for insomnia and morning sickness

— 1961 William McBride, an Australian doctor, sounded alarm

— 1972 Grünenthal paid DM 110m to trust in Germany, where Government paid a similar sum. Grünenthal contribution ran out by the mid1990s, leaving victims with Government payments only

— 1975 Distillers reached deal in Britain, updated several times since

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