Asbestos victims have rejected a "morally bankrupt" proposal for James Hardie to ditch lump sum compensation packages in favour of installment payments.

The fund set up to compensate victims of James Hardie’s building products warns it will face a shortfall by 2017 and wants to change how it handles payouts to sufferers. The Asbestos Injuries Compensation Fund is seeking NSW Supreme Court approval to pay compensation to victims in instalments, rather than…