Government lawyers are seeking to block compensation payments to people who developed the devastating sleep disorder, narcolepsy, as a result of a faulty swine flu vaccine.

The Pandemrix vaccine made by GlaxoSmithKline (GSK) was given to 6 million people in Britain and millions more across Europe during the 2009-10 swine flu pandemic, but was withdrawn when doctors noticed a rise in narcolepsy cases among those who received the jab.

In June, a 12-year-old boy was awarded £120,000 by a court that ruled he had been left severely disabled by narcolepsy caused by Pandemrix. The win ended a three-year battle with the government that argued his illness was not serious enough to warrant compensation.

Narcolepsy is a permanent condition that can cause people to fall asleep dozens of times a day, even when they are in mid-conversation. Some suffer from night terrors and a problem with muscular control called cataplexy that can lead them to collapse on the spot.

The boy, who remains anonymous, has become disruptive at school because he is so tired and finds it almost impossible to socialise. He needs to take several naps in the school day and cannot shower unattended or take a bus alone. He may never be able to drive as an adult.

The government has paid out to the boy’s family, but has nonetheless asked the court of appeal for permission to challenge the decision. A successful appeal would effectively deny compensation to 100 more families awaiting damages and could rule out any prospect of damages for other children who are injured by different vaccines in the future.

“It is causing tremendous delay in getting compensation to those in dire need of help and who are entirely innocent and blameless people,” said Peter Todd, the solicitor for the family of the 12-year-old boy and a partner with the London firm Hodge Jones and Allen. “They were responsible enough to get vaccinated and unfortunately have suffered a severe brain injury due to a defect with the vaccine, which was not detected as it was not tested at all on children before it was given out.”

The government argues that vaccine damages should be decided on the immediate, rather than the future, impact of the vaccine-related injury. In this case, that would mean comparing the life of a 12-year-old boy with narcolepsy with a healthy boy the same age. Any effect on his future sex life, his ability to drive, his ability to work or go to university would be completely disregarded.

“That is a radical interpretation of the law. It is very hard to show that you are disabled enough [to qualify for compensation] if the vast majority of your disability had to be ignored,” said Todd. “If their interpretation was accepted by the court of appeal, it would virtually abolish the prospects of anybody ever getting any vaccine injury compensation in the UK, because vaccines are mainly given to children and usually very young children.”

Injuries caused by vaccines are very rare. In Britain, only about 1000 awards for vaccine-related injuries have been handed out since 1979. Only in very rare cases did children develop narcolepsy from Pandemrix, which is a very different formulation to the seasonal flu vaccine. A major study by the Health Protection Agency in 2013 found that one in every 55,000 swine flu jabs triggered the sleep disorder. To qualify for the Department of Work and Pension’s vaccine damage payment scheme, a person has to be at least 60% disabled, the equivalent to the loss of one hand.

The government has long argued that those who developed narcolepsy from Pandemrix vaccination are not seriously enough disabled to qualify for damages. Last year, a 23-year-old nursery assistant who became narcoleptic after the jab took her own life. She left a note telling her family that living with the sleep disorder made her life unbearable.

In July, scientists at Novartis Vaccines reported progress in understanding how Pandemrix causes narcolepsy in a small percentage of people. Writing in the journal Science Translational Medicine, they described how in affected people, the jab destroyed the bulk of 70,000 neurons in the brain that produce a “wakefulness” hormone, hypocretin.

A government spokesperson said: “We are asking the court of appeal for permission to appeal against a decision made by the upper tribunal on the vaccine damage payments scheme. It would not be appropriate to comment further until the conclusion of this process.”

A separate claim against GSK for full compensatory damages is being discussed with the Department of Health, as the pharmaceutical company had an indemnity in their contract to provide Pandemrix to the government.