Families of men killed at the Pike River mine say Cabinet's decision not to pay compensation is another example of the Government failing to take responsibility for the disaster three years ago.
A Royal Commission found the then Department of Labour failed to properly supervise operations, so the families of the 29 men who died say the Government is liable.
The men died after a series of explosions at the West Coast mine that began on 19 November 2010.
The Cabinet decided on Monday it would not step in to pay the more than $3 million in compensation awarded the families. A district court judge awarded reparation in July despite Pike River Coal being in receivership.
Prime Minister John Key says paying what the now defunct Pike River Coal cannot would set an unwanted precedent.
The lawyer for many of the families, Nicholas Davidson, QC, says they are dispirited by the Cabinet decision, and the lack of responsibility for the failings of the Labour Department.
"Wherever they turn, to any entity which they consider carries some degree of responsibility, the door is shut. There's no way for them to proceeed at this stage through a legal action, although there may be some difference in that regard for the men that survived the explosion."
Mr Davidson says while the apologies from the Government are appreciated, it needs to put its money where its mouth is.
Labour Party leader David Cunliffe says the Government's refusal to pay compensation is morally repugnant and is cheating grieving families out of court ordered compensation.
Mr Cunliffe says government agencies ACC and the New Zealand Superannuation Fund had investments in Pike River Coal and the Prime Minister should set expectations about the agencies particpating in a payout.
