A still from the film Pioneer, based on the experiences of the first generation of North Sea divers. Photo: Pioneer
However, Henning Haug, the head of the of Offshore Divers Union, has said his members will refuse the offer.
"The divers wanted a quick answer, and this is what we have given them," said Norwegian labour minister Robert Eriksson. "I think it's a good deal."
The divers will now each be eligible to receive 5.3 million kroner each in compensation for the long term health effects of their work.
Many claim to have suffered serious health problems, such as lung disease, encephalopathy, reduced hearing and post traumatic stress disorder (PTSD), as a result of the dives they undertook from 1960 up until the 1980s.
Erik Johnsrud, a lawyer for the Offshore Divers Union accused Eriksson of "shoddy" treatment.
"The way the minister has handled this case is extraordinary," he said. "He said that there would be negotiations, and then he comes up with an offer of 1.7 million, and just says, "this is what you get.'"
Johnsrud's said that his calculations suggested that each diver had on average sustained about eight million kroner of damage.
"They are prepared to receive less than eight million, but this is low, and presented in a shoddy way," he said.
In December, the European Court of Human Rights in Strasbourg ruled that the Norwegian authorities had violated the divers' right to a private and family life — Article 8 in the Human Rights Act — by failing to provide them sufficient information on the health impacts of the rapid decompression used in their dives.