The Northern Ireland Secretary has been accused of treating abuse survivors like "political pawns".
Karen Bradley told victims' groups yesterday that political parties would be invited to consider the issue as part of negotiations to restore devolved institutions.
A redress scheme, in which victims would have been paid between £7,500 and £100,000, was one of the recommendations of Historical Institutional Abuse Inquiry (HIAI) two years ago.
Its proposals have never been implemented due to the Stormont impasse.
Mrs Bradley has been under mounting pressure to introduce the scheme via Westminster.
Northern Ireland's two biggest political parties reacted with strong criticism of her today.
Sinn Féin vice-president Michelle O'Neill accused Mrs Bradley of using victims as political pawns.
"Compensation for victims of historical institutional abuse should not be a matter for the political negotiations and Karen Bradley is morally and politically wrong to attempt to make it so," she said.
"Not only is British Secretary of State once again abdicating her responsibilities to victims, she is now attempting to turn them into political pawns where their needs become a matter for negotiation.
"That is shameful. Karen Bradley needs to start putting the needs of victims and survivors before her own political priorities and immediately put in place the required legal and financial framework to assist them."
DUP leader Arlene Foster said in the ongoing absence of the Northern Ireland Assembly the UK government has a "moral duty" to deliver the compensation.
She said: "I have met many of the families impacted. I want to see them receive justice but also have their suffering recognised financially. The delay is a shame and disgrace.
"A lack of devolution has been a barrier to this matter being progressed.
"This is why devolution should be restored immediately so matters like this - compensation - can be taken forward by ministers.
"In the absence of devolution, the government has a moral duty to meet this financial commitment but ultimately the institutions who closed their eyes to the abuse must be prepared to make their contribution to this compensation as has happened elsewhere."
Ulster Unionist MLA Mike Nesbitt said: "In suggesting the issue should be included in the discussions over the Programme for government, Mrs Bradley is suggesting victims become pawns in a negotiation, potentially bartered against the issues that are holding up the restoration of devolution.
"That is morally wrong and politically crass."
Amnesty International said the UK government has so far failed to deliver either a promised apology or financial redress.
Patrick Corrigan, Northern Ireland director of Amnesty International, accused Mrs Bradley of "trying to shirk responsibility".
"The Secretary of State has been asked by the head of the civil service to fulfil a moral responsibility to abuse victims by bringing forward legislation at Westminster," he said.
"Her attempt to shirk that responsibility is a shameful betrayal of victims who have been let down too often by those supposed to be protecting their interests.
"She should listen to the head of the civil service and to victims across Northern Ireland and bring this long, drawn-out process to a conclusion."