Almost 170 claims from parents of deceased children whose organs were removed without their permission have been dropped, saving the exchequer millions in potential compensation payments, the head of the State Claims Agency (CSA) has revealed.

The organ-retention scandal broke towards the end of the 1990s when it emerged thousands of mainly stillborn children had organs removed without their parents' knowledge. The organs were sold to research laboratories.

Then health minister Micheál Martin established a non-statutory inquiry – the Dunne inquiry – but four years and €20m later, his successor Mary Harney closed it down before producing a report.

Highly critical of the government's stand, parents lodged claims against the relevant hospitals, health boards and pathologists involved.

These claims were subsequently handed over to the SCA, which handles claims against state institutions.

Ciaran Breen, head of the SCA, has now convinced solicitors representing the parents to discontinue the claims.

Announcing 2009 figures, Breen said the agency has also settled or discontinued over 600 unresolved army deafness claims at a fraction of the original cost.

Up to 2005, over 16,000 army deafness claim cost taxpayers almost €300m, with average settlements around €18,000. But Breen said the SCA has settled most of these cases for sums of "around €1,000 to no more than €4,000".

Breen also revealed many of the 225 claims by people who were abused by teachers while attending primary and secondary schools have also "fallen away" in the wake of the Louise O'Keefe case.

O'Keefe claimed she was abused repeatedly by the principal of the school she attended but lost her claim against the minister for education at the High Court and the Supreme Court.

The SCA successfully defended O'Keefe's claim on the basis that the minister was not the employer of the principal involved and therefore not responsible.

The discontinuation of these claims against the state saw the number of public liability/property damage claims against the state fall from 3,550 in 2008 to 2,310 last year.

But as the more costly clinical negligence claims re­main­ed static at 1,778 last year, the total paid out by the agency covering all classes of claims rose from €53m in 2008 to €64m.