The Minister of Health Pete Hodgson needs to explain the decision to withhold one-third of the compensation awarded to former patients of the Lake Alice mental hospital, says National party health spokesman Jonathan Coleman.

Judge Tom Broadmore has criticised the Government's 'political' decision to secretly withhold 30 per cent of the compensation to former Lake Alice patients to cover non-existent 'legal fees' in a second-round settlement, as reported in this week's print edition of the NBR.

"It is unacceptable if there was a Government decision made behind closed doors to hold back money from the claimants," says Dr Coleman. The recent judgment awarded a further $35,000 that was found to have been withheld from final payment to a former patient, with implications for the 87 other second-round claimants.

"The Government needs to be upfront about how the decision was reached, apologise to the claimants, and stop dragging the chain in paying them the $3 million that is rightfully theirs," Dr Coleman says.