Health Department records brought to light by a Freedom of Information request have shown the drug Pantopaque, produced by Lafayette Pharmacal, should never have been at dozens of hospitals during 1974-78.

It was considered an experimental drug and was not approved for general distribution when it was sent to more than 50 hospitals and medical clinics. It was bought into Australia on a restricted permit that allowed it to go to just four doctors practising at three Melbourne hospitals and one Perth hospital from 1974-1978.

However, in spite of restrictions on its import, Pantopaque was circulated in large quantities to hospitals and medical clinics in the ACT, NSW, Victoria, Queensland, Tasmania and Western Australia, earning the drug importer Cook Incorporated a rebuke from the Theraputic Goods Branch in June 1978. The TGB demanded an explanation, letters of correspondence between the two organisations show.

Red flags were raised about safety at the time. The Department of Veterans' Affairs' acting medical superintendent documented the death of a patient in August 1978 who had complained of abdominal pains after being injected with Pantopaque. The patient went into convulsions for two and a half hours before being comatosed. The patient never regained consciousness but was placed in intensive care, where bronchopneumonia developed and the person died. The TGB (Therapeutic Goods Administration predecessor) also wrote to the Bureau of Drugs in the US in November 1978 to instruct "a further adverse reaction of meningitis leading to death'' had been reported following the injection of Pantopaque.

The drug, an oil-based contrast medium containing iophendylate dye, was injected into patients' cerebrospinal fluid that allowed details of the spinal cord and spinal nerves to be visualised by X-ray. It has been blamed for many cases of adhesive arachnoiditis, an inflammatory condition affecting the middle layer of the meninges which are the membranes surrounding the spinal cord. The spinal nerves stick together, preventing sufferers from moving freely, causing pain and other symptoms. The oil-based contrast media was also produced by GlaxoSmithKlein which marketed it as Myodil.

The drug was not approved for general distribution by Cook Incorporated in Australia until October, 1979, before authorities were aware of its full potential impact.

Canberra bricklayer Joern Hagemann was injected with the drug after a construction accident in 1978. Following years of crippling pain attributed to the drug, Mr Hagemann has waged a lengthy battle to obtain documents that reveal how the dye was allowed to be used on him and thousands of others. Mr Hagemann said what had been revealed by the documents warranted a Royal Commission.

"It is acknowledged (Pantopaque) has dissolved rubber, glue and plastics so why was it unquestioningly permitted entry into Australia before approval in 1979 and why did the TGA allow the distribution just so the medical profession could inject it into people's spines where it migrated into their brain, lungs and other areas?'' Mr Hagemann said.

"The importing, distributing company Cook Incorporated must still be held accountable to the nation for the destruction, the unimaginable suffering and massive social and economic costs they have incurred.''

A spokeswoman for the TGA told Fairfax Media that Pantopaque had been available in Australia from at least 1961.

"The availability of Pantopaque in Australia in the early 1960s preceded any Commonwealth involvement in medicine regulation, and its use was considered the best method available at the time to diagnose and manage serious conditions of the spine,'' she said.

"Compulsory pre-market evaluation by the Commonwealth Government of the quality, safety and efficacy of medicines was introduced in Australia in 1970.

"Pantopaque was regarded as experimental between 1974-78 as it had not yet received general marketing approval.''

The spokeswoman said the Therapeutic Goods Branch told Cook Inc that its unauthorised distribution of Pantopaque around Australia "was viewed with profound concern".

"However, given the time that the product had been available (from at least 1961) and the apparent paucity of adverse events reported, approval to continue to supply was granted.''

Angry victims have been seeking answers and compensation for years and a Parliamentary roundtable that was established in late 2012 recommended drug manufacturer GlaxoSmithKline should establish a charitable foundation for sufferers.

The roundtable concluded that Myodil and Pantopaque were used in myelography from the 1950s to the 1980s in Australia, the US and UK.

It found that it was widely accepted that the drug caused adhesive arachnoiditis in some patients.

GlaxoSmithKlein told the Parliamentary round table that court action brought against the company in Australia in 1999 was dealt with by way of confidential settlements, without the drug company making any admissions of guilt.

GSK said Myodil was not withdrawn from the market in Australia but discontinued in 1987 when newer diagnostic radiographic techniques became available.

Cook Incorporated did not respond to requests for comment.