The government has taken advantage of actuarial assessments of the Mineworkers' Pension Scheme and British Coal Staff Superannuation Scheme using an 'expected return on assets' basis to siphon off £419m last year, according to the annual report and accounts of the Department for Business, Enterprise and Regulatory Reform.

The deduction was made under an arrangement decided when British Coal was privatised in 1994 under which the state guarantees future payments from the two funds allowing valuations by the government actuary to be made on an 'expected return on assets' basis instead of the more usual index-linked gilt rate.

It has seen a total of over £4bn removed from the funds in what Tory Treasury spokesman Phillip Hammond has warned is the 'opposite of the prudent approach' and 'a reckless strategy' that could land future taxpayers with a huge liability in the event returns are lower than expected.

He called for an urgent review of the treatment of the funds, worth an estimated total of £27bn, in a deal concluded under the Thatcher government which entitled the state to 50% of all surpluses with the other 50% used to enhance payments to pensioners.

Despite having no contributing members, the two schemes are 70% invested in equities instead of the government gilts favoured by other schemes in a similar position, with 250,000 of its 350,000 members already retired.

The disclosure has caused the National Union of Mineworkers and other miner pensioner campaigners to step up demands for the government to end deductions which John Ralfe, the independent pensions consultant, has warned are based on a 'fictitious' surplus of £1,600m which he believes is actually a £900m deficit.

But DBERR said the valuation of the schemes is in the hands of the government actuary and the treatment of funds is based on 'appropriate actuarial guidance'.