The news came the week after German prosecutors dropped their case against the sect's former doctor Hartmut Hopp, 74, citing a lack of evidence that he was complicit in the sexual abuse of children.

SEE ALSO: Germany ends probe into doctor from Chile-based Nazi sect

The sect was founded in 1961 by Paul Schäfer, a former Wehrmacht (German Army) soldier, lay preacher and convicted paedophile, who abused, drugged and indoctrinated residents and kept them as virtual slaves.

His group had close ties to the 1973-1990 dictatorship of Augusto Pinochet and would torture and “disappear” regime critics.

Eligible for the payments will be some 240 German and Chilean survivors, including about 80 who now live in Germany, from a fund valued at an initial €3.5 million until 2024.

Some will also receive pension-style payments.

A long-time campaigner for the victims, German Greens lawmaker Renate Künast, labelled the payments largely “symbolic” but “acceptable”.

The European Center for Constitutional and Human Rights however charged that Germany's Foreign Ministry was “dodging its legal responsibility to compensate the victims” more fully, adding that “many Chilean victims were left out”.

'Violence, slave labour'

A German government and parliamentary committee in its report said Friday that Schäfer “tore families apart, abused countless children and actively collaborated with Pinochet dictatorship henchmen on torture, murder and disappearances.

“The survivors still suffer massively from the severe psychological and physical consequences after years of harm caused by violence, abuse, exploitation and slave labour.”

However, it also said that the German government “is of the opinion that no legal claims against the Federal Republic of Germany have arisen” from the abuses in Colonia Dignidad.

The support measures for victims would be paid “exclusively out of moral responsibility and without recognition of a legal obligation”, it said.

Germany's President Frank-Walter Steinmeier had acknowledged in 2016, when he was Foreign Minister, that “for many years … German diplomats at best looked the other way — and clearly did not do enough for the protection of their compatriots in this colony”.

The scale of the atrocities committed at the fenced-in mountain commune 350 kilometres south of Santiago came to light only after the end of Pinochet's regime.

Schäfer, having initially run from justice, was arrested in Argentina in 2005 and then jailed in Chile for child sexual and other abuses. He died behind bars in 2010 at the age of 88.

His right-hand man Hopp, who ran the compound's clinic, was convicted in Chile of complicity in Schaefer's sex crimes but fled to Germany in 2011 before the court ruling could be imposed.

A German court initially upheld the jail sentence but a higher court, and state prosecutors, have since found that the evidence provided by the Chilean court fell short of that required by German justice.

By Frank Zeller