OTTAWA -- Nortel employees predicted a bleak future filled with illness, poverty, homelessness and even suicide after the Harper government signalled it will kill legislation aimed at protecting workers from losing their long-term disability benefits.

The disabled employees were distraught Thursday after Conservative senators used their majority on the Senate's banking committee to recommend that the upper house not proceed with the bill.

The red chamber, now dominated by Tories thanks to a raft of recent appointments by Prime Minister Stephen Harper, is virtually certain to accept the committee's recommendation.

And in the House of Commons, Industry Minister Tony Clement indicated he believes Conservative senators are doing the right thing, even though it means about 400 disabled Nortel employees will be cut off long-term disability benefits at the end of next month.

That assertion won him cries of "shame" from a small group of Nortel employees watching from the public gallery. They were escorted from the Commons, at least one of them in tears.

"It's going to be Christmas time when all this happens," Sue Kennedy, the court-appointed representative of the disabled Nortel employees, said in an interview later.

"I can't even think about Christmas, about next year, because I know how many people are going to be left in a desperate, desperate situation -- out on the streets, literally. Some people are saying ... if nothing happens to help us, they don't want to live a life of poverty and a life where they can't pay for their medications, a life in pain."

Kennedy said one employee has already attempted suicide.

Kennedy, a mother of two who suffers from multiple chemical sensitivity, said loss of the disability benefits will slash her family's income by two-thirds.

The bill, proposed by Liberal Senator Art Eggleton, sought to ensure that disabled Nortel employees would be given preferred status among creditors when the once-mighty telecommunications technology giant is finally dissolved.

Most of the company has been sold off since Nortel filed for bankruptcy protection in January 2009.

Eggleton called the Tory senators' move to kill his bill "deplorable." And he said the move was clearly orchestrated by "head office."

Indeed, the regular, long-standing Tory members of the Senate banking committee were replaced for Thursday's vote on Eggleton's bill by senators who were recently appointed by Harper to the upper house.

In the Commons, Liberal seniors critic Judy Sgro portrayed the prime minister as the Grinch who stole Christmas.

"This bill was the last hope for these sick, disabled, and dying Canadians. Why is the prime minister so intent on hurting these vulnerable Canadians? How can he be so heartless? " she demanded.

Clement expressed sympathy for the plight of disabled Nortel workers but he pointed out that cutting off disability benefits was part of a court-approved settlement agreed to by all parties. He said trying to retroactively change that settlement by approving Eggleton's bill would result in "endless litigation, to the detriment of all" Nortel employees.

Clement castigated Liberals for trying to give Nortel workers "false hope" and said the government is "working on real solutions" to their plight.

Kennedy was skeptical.

"It's pretty clear to me that Harper and the Conservatives are not supporting this bill," she said. "That wouldn't be so bad if we thought they had another plan, another way to help us, but they've given absolutely no indication of that."

In a written statement, Vim Kochhar, a Tory member of the Senate banking committee, encouraged Nortel stakeholders to voluntarily agree to allow disability claimants to withdraw their share of funds from Nortel's assets.