A law aimed at quashing the wrongful convictions of sub-postmasters caught up in the Horizon IT scandal is being introduced by the government later.

The proposed Post Office (Horizon System) Offences Bill “marks an important step forward in finally clearing” the names of hundreds of wronged branch managers who have had their lives “callously torn apart”, Prime Minister Rishi Sunak said.

The legislation will exonerate those convicted in England and Wales on the basis of the faulty Horizon accounting software in what has been branded the biggest miscarriage of justice in British legal history.

Downing Street said that under the law, convictions will be automatically quashed if they meet the following criteria:

• The convictions were prosecuted by the Post Office or Crown Prosecution Service
• They were for offences carried out in connection with Post Office business between 1996 and 2018
• They were for relevant offences such as theft, fraud and false accounting
• They were against sub-postmasters, their employees, officers, family members or direct employees of the Post Office working in a Post Office that used the Horizon system software.

Those with overturned convictions will receive an interim payment with the option of immediately taking a fixed and final offer of £600,000.

Mr Sunak said: “While I know that nothing can make up for what they’ve been through, today’s legislation marks an important step forward in finally clearing their names.

“We owe it to the victims of this scandal who have had their lives and livelihoods callously torn apart, to deliver the justice they’ve fought so long and hard for, and to ensure nothing like this ever happens again.”

More than 700 sub-postmasters were prosecuted by the Post Office and handed criminal convictions between 1999 and 2015 as Fujitsu’s faulty Horizon IT system made it appear as though money was missing at their branches.

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The government will also bring forward “enhanced” financial redress for postmasters who, while not convicted or part of legal action against the Post Office, made good the apparent losses caused by the Horizon system from their own pockets.

They will be entitled to a fixed sum award of £75,000 through the Horizon Shortfall Scheme, Downing Street said.

Those who have already settled for less money will have their compensation topped up to this level.

The new Horizon Convictions Redress Scheme, to be run by the Department for Business and Trade, is to open for applications to those who have had their convictions quashed “as soon as possible” once the legislation has passed.

The government hopes the bill will receive royal assent and become law ahead of MPs’ summer holiday.

Business Secretary Kemi Badenoch said: “It is absolutely right that we sweep away the convictions wrongly given to postmasters on the basis of bad evidence, and it is a disgrace that they were ever pursued by the Post Office.“

Ministers have decided the scale of the scandal is so great that the usual process of individuals going through the courts would take too long.

Kevan Jones, Labour MP for North Durham and member of the Horizon Compensation Advisory Board, said: “It’s great news that the government has taken the advice of the independent Advisory Board, on which I sit, and introduced the Post Office Offences Bill.

“This will exonerate hundreds of victims who were convicted as a result of the Post Office Horizon IT system.

“It is essential that we get this bill passed as soon as possible before Summer recess so that those affected can get the justice and compensation they have fought so long for.”