Carl Wiliams compo deal saved Victorian money: Andrews

It has outraged crime victims supporters but Victorian Premier Daniel Andrews says the taxpayer-funded compensation for the teenage daughter of slain gangland killer Carl Williams is the best deal the government could get.

Dhakota Williams, 14, has received a reported six-figure sum, to be held in trust until she's 18, in a confidential settlement with the government.

She was nine when her father was beaten to death at the maximum-security Barwon Prison in April 2010.

Her mother Roberta and grandfather George Williams have abandoned their claims and will receive no money.

Mr Andrews says he's not pleased, but settling the case out of court without admitting liability saved "potentially millions" if the Williams case had won.

"When you're told by the independent advisers and the government's lawyers that this is the best deal you can practically hope to get you've got to take that advice," he told reporters on Wednesday.

The government has legislation before parliament seeking to force courts to consider a family's criminal activities in compensation payouts.

A Victorian Ombudsman's investigation found the murder, motivated by Williams turning police informer, was a failure in the prison's duty of care to ensure his safety.