WASPI campaigners have threatened the government with legal action unless it reconsiders its decision to reject compensation for millions of women affected by changes to the state pension age.

A watchdog recommended that compensation be paid to women born in the 1950s, whose state pension age was raised to match men born in the same decade.

But Prime Minister Sir Keir Starmer said taxpayers cannot afford the £10.5 billion payout.

The Women Against State Pension Inequality (Waspi) campaign has sent a “letter before action” to the Department for Work and Pensions (DWP), warning of High Court proceedings if the issue remains unresolved.

Group chairwoman Angela Madden said members will not allow the DWP’s “gaslighting” of the women to go unchallenged.

Waspi campaigners argue the government’s reasons for rejecting the Parliamentary and Health Service Ombudsman (PHSO) report, which found that the women should be paid up to £2,950 each, are legally unfounded.

The group, which has launched a £75,000 CrowdJustice campaign to fund legal action, said the government has 14 days to respond before they file the case.

Sir Keir, Chancellor Rachel Reeves and Work and Pensions Secretary Liz Kendall — who dismissed a compensation package — are among the senior ministers who backed the campaign when Labour was in opposition.

The change was first announced in the 1990s, and accelerated over a decade ago under the Conservative-Liberal Democrat coalition government, affecting about 3.6 million women in Britain.

But there was a 28-month delay in notifying them about the changes, for which the government has apologised.

Waspi campaigners argue that many women suffered financial hardship and were forced to rethink their retirement plans.

Ms Madden said: “The government has accepted that 1950s-born women are victims of maladministration, but it now says none of us suffered any injustice.

“We believe this is not only an outrage but legally wrong. We have been successful before and we are confident we will be again.

“But what would be better for everyone is if the [Work and Pensions Secretary] now saw sense and came to the table to sort out a compensation package.

“The alternative is continued defence of the indefensible — but this time, in front of a judge.”

Independent MP Jeremy Corbyn told the Star: “The government have woefully underestimated the determination of these women, who are rightfully continuing to demand the compensation they deserve.

“I said that the government would rue the day they made this decision to betray the Waspi women, who will always have my full support.”

SNP MSP Clare Haughley also backed the challenge for the women to “get the compensation they deserve.”

Official estimates show that 331,000 women in Scotland have been affected by the DWP’s error.

Ms Haughley said: “Chickens are coming home to roost for Labour — too many promises have been broken. It’s high time they were challenged and held to their word.  

“From the moment this Labour government came into office, Scottish pensioners have been left behind and let down — first when they scrapped the Winter Fuel Payment and then when they broke their promise to compensate Waspi women. 

“Keir Starmer and [Scottish Labour leader] Anas Sarwar promised fair and fast compensation for the Waspi women, but that promise appears to be worth nothing now that they’ve got the power to deliver it.”

The government also faces legal action over its cut to winter fuel payments.

These were withdrawn for all but the poorest pensioners by Labour in the autumn Budget.

Since then, research by Unite shows that 67 per cent of pensioners have reduced their heating, and 63 per cent report feeling the cold more often.

The union has launched a campaign to defend the payment, including through a judicial review to overturn the cuts.

A government spokesperson said it accepts the ombudsman’s findings on the Waspi case, but insisted earlier letters “wouldn’t have affected” findings that by 2006, 90 per cent of the women knew about the change.

“For these and other reasons the government cannot justify paying for a £10.5bn compensation scheme at the expense of the taxpayer,” they said.