Sir Alan Bates has condemned the Government’s handling of Post Office compensation schemes as "an utter disaster" during a scathing appearance before the Commons Public Accounts Committee.
The leading campaigner behind efforts to expose the Horizon IT scandal criticised the level of Government involvement in compensation arrangements.
He argued the process had become bogged down in bureaucracy and continued to cause distress for victims.
Sir Alan said: "There is a fundamental problem with these schemes and that is the Government being involved with them.
"That is a big mistake. The civil service just grinds them into the ground."
The former sub-postmaster's campaign was dramatised in the ITV series Mr Bates vs The Post Office.
He told MPs that compensation arrangements were still inflicting hardship on people affected by the scandal.
"There are so many reasons why they are wrong and why they have caused so much grief, even nowadays."
The committee hearing examined seven Government compensation schemes.
It included four linked directly to the Horizon scandal which saw hundreds of sub-postmasters wrongly prosecuted following faults in the Post Office’s accounting software.
Sir Alan Bates says Post Office compensation scheme is an ‘utter disaster’
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By February this year, around £3.5billion had been paid out across all seven compensation schemes, although estimates suggest a further £11billion remains outstanding.
A Commons report published in March found that more than 11,300 claimants had received compensation payments totalling £1.44billion.
However, thousands of former sub-postmasters were still waiting for full settlements.
Sir Alan argued future compensation schemes for people wronged by the state should be managed independently rather than overseen directly by Government departments.
He also warned that trust among victims had collapsed following years of legal battles and delays.
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Sir Alan pointed to lengthy delays in establishing compensation arrangements
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Sir Alan told MPs that out of more than 700 Horizon victims whose criminal convictions had been overturned, only around 100 had come forward to engage with compensation schemes.
He said: "The victims have lost trust in the system and they wouldn't engage with these people."
The campaigner also criticised the legal structure surrounding compensation claims, describing the process as overly confrontational.
He added: "You have lawyers against lawyers again lawyers."
Windrush commissioner Rev Clive Foster, who also appeared before the committee, echoed concerns about the lack of confidence many victims continue to feel towards official processes.
Rev Foster said: "Trust is still very fragile and people feel like they have to be fighting the state all over again."
Both witnesses raised concerns about ongoing difficulties obtaining key documentation required to process claims and support investigations.
Sir Alan described access to records as "a major problem, and has been over the whole process".
Rev Foster also highlighted confusion faced by claimants attempting to navigate compensation systems.
He said: "People just don't know where to start."
Sir Alan revealed that investigators from the Metropolitan Police were now facing similar problems securing documents linked to the scandal following a recent meeting with victim groups.
He said: "They are up to a billion pieces of evidence so far gathered."
Sir Alan questioned whether relevant materials may be being withheld from investigators as police continue their criminal inquiry into the affair.
His evidence to MPs came after police chiefs warned last week that the Metropolitan Police investigation into the Post Office scandal could face delays of up to five years unless additional funding is secured.