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OTTAWA, July 25 (Reuters) Canada, still struggling with the after-effects of a long-running scandal over tainted blood, today said it planned to pay a total of C$1.1 billion (965 million dollars) to around 5,500 people who had contracted hepatitis C from transfusions.

The victims had been excluded from an earlier compensation plan that paid out money to people who were infected between 1986 and 1990, the year when Canada adopted tests that better screened blood for impurities and diseases.

Prime Minister Stephen Harper, whose Conservatives promised in opposition they would compensate all victims, said the plan still had to be approved by courts where people seeking compensation have launched class action lawsuits.

''Because these victims have waited long enough for what is due to them, our government is going to do everything in its power to ensure that matters are moved ahead as quickly as possible,'' he told a news conference, saying he hoped the money would be paid out early next year.

Tens of thousands of blood transfusion recipients in Canada contracted the AIDS and hepatitis C viruses from contaminated blood and blood products in the 1980s.

Around 3,000 have died so far and some of the money Harper announced will go to the estates of the deceased.

Renee Daurio, who caught hepatitis C from a blood transfusion in 1979, welcomed the promise of compensation but said it could not erase years of suffering.

''No amount of money can bring back your health. No amount of money will bring those lost years back,'' Daurio told CBC television, saying she took up to 50 pills a day.

Three doctors, the former head of the Canadian Red Cross Society's blood transfusion service and the U.S. pharmaceutical company that provided the blood are currently on trial.

Prosecutors say the accused knew the blood could be contaminated but continued to use it.

The charges include criminal negligence causing bodily harm and endangering the public, which carry a maximum 10-year prison sentence. The trial is expected to end early next year.

The earlier compensation package, brought in by the then Liberal government in 1998, covered around 10,000 people but would not pay those who became infected before 1986 on the grounds that no suitable tests existed at that time.

''All should be compensated equally, because all of the victims have endured pain and suffering,'' said Harper, who was speaking in the southern Ontario town of Cambridge. His Conservative Party took office in February this year after more than 12 years of Liberal rule.

Reuters SK VP0120