Britian's Corby Borough Council, found negligent in tackling environmental pollution that resulted in birth defects, has been ordered to pay families affected an initial £1.6 million.
A "statistically significant" cluster of children with defects to the hands and feet were born in the area between 1989 and 1999. Doctors previously noted that incidences of deformities in Corby were 10 times higher than a town with 60,000 should expect.
Lawyers said the Corby scandal was the biggest child poisoning case since thalidomide.
Last month a High Court judge ruled that Corby had been negligent in the way it dismantled a steelworks during the 1980s and 90s, which may have led to birth defects in 16 children.
Mr Justice Akenhead had said: "There was an extended period between 1983 and August 1997 in which Corby Borough Council was extensively negligent in its control and management of the sites which they acquired from British Steel and otherwise used.
"Corby Borough Council is liable in public nuisance, negligence and breach of statutory duty, obviously subject to it being established in later proceedings by individual claimants that their particular conditions were actually caused by the defaults identified in this judgment."
Actually the council could face a bill of up to £10 million on top of the legal fees if the 16 complainants in the case, today aged between 11 and 22, win their individual legal battles for compensation. They will have to prove that their birth defects were a direct result of exposure to the toxic waste spread by the council's action. Mr Justice Akenhead already ruled that the council was not liable for a further two complainants because they were born after August 1997.
Campaigners said the ruling, following a 10-year legal battle, was the first in the world to find that airborne pollution could cause such birth defects.
The families are now expected to pursue claims for millions of pounds in compensation, either sharing damages or returning to court to make individual claims. It is thought up to 60 more families are ready to come forward to pursue claims against the council however.
Corby council is due to meet next Tuesday to decide whether it should appeal against the High Court judgement.
Following the ruling last month, Chris Mallender, the council chief executive, said: "We need time to reflect on this. We're not saying that we will appeal, we will not say we will not accept the judgment.
"We are not yet at the point of saying sorry because nobody yet is responsible."