A Royal Shakespeare Company (RSC) actor who was catastrophically injured by a hit-and-run driver has been defeated in his court bid for more than £1 million in Government compensation.

If Kenneth Dudley Moore had won his case against the Department for Transport (DfT), the law concerning how victims of untraced or uninsured drivers are compensated would have had to be rewritten.

However, Court of Appeal judges dealt him a blow when they ruled the ex-actor, who is in his 40s, had left it too late to sue.

Mr Moore, of East Close, Middleton, near Bognor, who went under the stage name Ken Dudley, was a member of the RSC with a promising acting career ahead of him when he was knocked off his motorbike by a hit-and-run driver in April 1995.

Aged 28 at the time, Mr Moore suffered head wounds, which resulted in brain damage, spinal injuries that left him in constant pain and post traumatic stress disorder. He was never able to return to his stage career.

But, because the driver who struck him was never traced, Mr Moore could not sue and instead made a claim against the Motor Insurers Bureau (MIB), an industry body set up to compensate victims of untraced or uninsured drivers.

The MIB awarded him £376,000 and this was later increased by an arbitrator to £585,000 in 2000. However, Mr Moore said he was the victim of "manifest unfairness and injustice" and argued the amount was not enough to compensate him for his suffering.

His counsel, Mr Robert Seabrook QC, argued at the Court of Appeal in London that, had the negligent driver been traced and insured, Mr Moore would have been able to sue him and, had his case been heard by a judge, he would have been awarded almost £1.2 million in damages.

The QC argued Mr Moore had been gravely under-compensated for his injuries because the Government had failed to properly "transpose into domestic law a 1983 EU directive".

The directive demanded that all EU member states must put in place systems to ensure victims of uninsured or untraced drivers receive at least the same level of compensation as other accident victims - but that had never been done in Britain, said the barrister.

But, striking the blow to the former actor's case against the DfT, the judge said his "cause of action" against the Government had arisen at the precise moment of the accident in 1995 - and his claim had therefore been launched long after the three-year statutory time limit had expired.