Campaigners for “Waspi women” hit by the rising state pension age reacted with fury on Tuesday, after work and pensions secretary, Liz Kendall, announced they will not be compensated by the taxpayer.

Kendall told MPs the government accepted the parliamentary and health service ombudsman’s findings earlier this year that her department had failed to communicate the changes adequately.

But she rejected its recommendation for a flat-rate compensation scheme, paying out £1,000 to £2,950 to each of the more than 3 million women affected.

Explaining the government’s decision, Kendall pointed to survey evidence from 2006, suggesting 90% of women in the relevant age group knew about the planned changes.

“Given the vast majority of women knew the state pension age was increasing, the government does not believe paying a flat rate to all women at a cost of up to £10.5bn would be fair or proportionate to taxpayers,” she told MPs.

The chair of the Women Against State Pension Inequality (Waspi) campaign, Angela Madden, condemned the announcement.

“This is a bizarre and totally unjustified move which will leave everyone asking what the point of an ombudsman is if ministers can simply ignore their decisions. It feels like a decision that would make the likes of Boris Johnson and Donald Trump blush,” she said.

The Liberal Democrats’ work and pensions spokesperson, Steve Darling, said it was a “day of shame” for Labour. “The new government has turned its back on millions of pension-age women who were wronged through no fault of their own, ignoring the independent ombudsman’s recommendations, and that is frankly disgraceful,” he said.

The SNP’s work and pensions spokesperson Kirsty Blackman called the decision “a devastating betrayal of the millions of Waspi women who have spent years campaigning for justice,” pointing to the fact that Scottish Labour leader, Anas Sarwar, had been supportive of the Waspi campaign.

Sharon Graham, general secretary of the Unite union – a major donor to Labour – also attacked the move. “Ministers are making the wrong choices – they need to turn back now because voters will not forgive them,” she said.

Unite, along with several other Labour-supporting unions, has also been highly critical of the government’s decision to remove the winter fuel allowance for most pensioners this winter.

John Major’s Conservative government in 1995 passed legislation to gradually increase women’s state pension age from 60 to 65 between 2010 and 2020, to match men’s. The timetable was then sped up in 2011.

Waspi campaigners have argued for many years that those born between 1950 and 1960 saw the shift introduced without adequate warning. In particular, they have argued that some women received no letter, personally informing them of the plans.

They have argued that some of those affected by the changes found themselves in poverty when they reached 60, the age at which they expected to start receiving the state pension – currently £221.20 a week.

Kendall agreed with the ombudsman’s finding of maladministration over the DWP’s tardiness in writing to affected individuals but she claimed that letters in themselves, “aren’t as significant” as the watchdog said.

After the ombudsman’s report was published in March, neither Rishi Sunak’s Conservative government, nor Labour, would confirm whether they would accept its recommendation for compensation.

But in the House of Commons on Tuesday, Kendall’s shadow, Helen Whately, told MPs that Labour had to take ownership of the decision not to fund such a scheme.

“Let’s be clear, the decision to provide no compensation is the government’s decision and they need to own it,” she said.

Keir Starmer was asked about the issue on a visit to Estonia on Tuesday, and said he didn’t think it was right for taxpayers to bear the costs of compensation.

“I do understand, of course, the concern of the Waspi women. But also I have to take into account whether it’s right at the moment to impose a further burden on the taxpayer, which is what it would be,” the prime minister said.

Under Jeremy Corbyn’s leadership, Labour included fully compensating the Waspi women in its 2017 and 2019 manifestos. When that point was raised with Kendall in the Commons, she said that her party had lost both of those elections.

Corbyn, who now sits as an independent MP, attacked the government’s decision. “First, the government cuts winter fuel. Now this? Whose side is the government on?” he posted on social media.