The organization may have to pay a small fine (C$5,000, equivalent to U.S.$4,000); but charges of criminal negligence could be dropped as part of a deal with prosecutors.

More than 1,000 people became infected with HIV and as many as 20,000 others contracted hepatitis C through blood transfusions and blood products in the 1980s. Many of the victims were hemophiliacs.

In 1997, a governmental inquiry was made which strongly criticized the Canadian Red Cross, which had run the country's blood supply system for decades.

As a result, the Red Cross was stripped of this role and was replaced by a government agency which is now in charge of blood collection and distribution throughout the nation.

The blood scandal also led to several lawsuits against the Red Cross.

After years of legal wrangling, the charity has decided to plead guilty to distributing the contaminated blood.

It said it would donate C$1.5 million (equivalent to U.S.$1.2 million) toward medical research and educational scholarships.

Federal prosecutor John Ayre said the fine was adequate, in view of the Red Cross status as a humanitarian organization, noting it no longer engages in blood collection or distribution.

The Canadian Red Cross has already paid victims $55 million in a separate fund.

Mike McCarthy, spokesman for the Canadian Hemophilia Society (CHS), said: "How can anyone be satisfied? Thousands of people lost their lives.

"Hundreds and hundreds of people are living with these fatal viruses today.

"There's no great outcome here for anybody that's gone through the tainted-blood scandal."

John Plater, Ontario president of the CHS, said: "Finally, the Red Cross has accepted responsibility for their part in the tainted blood tragedy.

"Its the least they can do for the sake of victims who have waited two decades for someone to be held accountable."

Dr. Pierre Duplessis, the secretary general of the Red Cross, made this statement:

"The Canadian Red Cross Society is deeply sorry for the injury and death . . for the suffering caused to families and loved ones of those who were harmed." In a public apology demanded by survivors of the victims and played on videotape in the court, Duplessis said the charity accepted responsibility for "having distributed harmful products for those that rely on us for their health."

In exchange for the guilty plea and public apology, prosecutors dropped criminal charges against the charity, including criminal negligence.

The Canada Red Cross did not start testing donated blood for HIV until 1985. By that time, it had already received word of hundreds of people who had contracted HIV from tainted blood.

In 2001, the following official statement was issued:

"The Canadian Red Cross Society and a number of other individuals and entities on October 5, 2001, implemented a Plan creating an HIV Fund. The HIV Fund is intended to make payments to persons directly infected with HIV-AIDS from blood or blood products received in Canada, or infected indirectly from such persons, and/or the family members of persons directly infected.

"No new lawsuits about tainted blood will be allowed against the Canadian Red Cross Society. Instead, persons with claims for damages due to HIV-AIDS from tainted blood may apply to the Referee of the HIV Fund."From the official HIV Fund Statement.