TORONTO - An Ontario woman who was wrongly accused of killing her two-year-old daughter calls it it "absolutely shocking" that her request for compensation has been refused.

Ontario's Criminal Injuries Compensation Board denied Brenda Waudby up to $25,000 because she didn't meet the criteria for nervous shock.

The board also denied the claim of Waudby's other daughter Justine Traynor, who was seized and placed in foster care for two years after her mother was charged.

Waudby, who lives in Peterborough, Ont., said Thursday her life was "torn to pieces" by the death of her daughter Jenna more than 13 years ago.

"I cannot move forward until this nightmare, which is being sustained and perpetuated by the government, is over," she said in a statement.

A lawyer for the two women, Julie Kirkpatrick, has asked Attorney General Chris Bentley to reverse the board's decisions.

The decisions are "shockingly dismissive of the genuine, extreme and ongoing pain and suffering" experienced by Waudby and Traynor, Kirkpatrick wrote in the March 30 letter.

"The denial of compensation by the Criminal Injuries Compensation Board is, unfortunately, consistent with a long pattern of government inaction and failure."

Waudby and several others were wrongly accused of killing children due in part to the autopsy mistakes of disgraced pathologist Dr. Charles Smith, whose work sparked a public inquiry.

Waudby was charged with beating Jenna to death in 1997 on Smith's opinion about the time of injuries.

A second-degree murder charge was dropped after other experts said the injuries were inflicted on the evening of her death, when she was in the care of a 14-year-old boy who was later convicted of manslaughter.

Waudby maintains Smith kept a hair from the autopsy, found five years after the charges against her were withdrawn, in a drawer.

She also said she found out disturbing details about Jenna's death at the public inquiry, including evidence that the babysitter had confessed to sexually assaulting her daughter.

"I had to review photographs of Jenna's body, and her genital areas, to prepare me for what others would see," she said in her statement.

After the inquiry, she was "devastated" to learn that Jenna's body was not buried intact because the coroner's office kept her rib cage.

"I cannot grieve my daughter until I know that she has been buried whole," Waudby said.

"I believe the government needs to quit dragging their heels and fix this."

The Goudge inquiry into Ontario's pediatric pathology system, which released its findings in 2008, slammed Smith for "irresponsible" testimony in a series of child death cases.

The inquiry was called in 2007 after it was revealed that Smith made mistakes in 20 child-death investigations, 12 of which resulted in convictions.

Waudby noted that the inquiry's recommendations included looking into a viable scheme for compensating the victims, but the government has remained silent on the issue.

While Waudby is unable to work and lives below the poverty line, the government has announced significant funding and resources for a new building at the Office of the Chief Coroner and the forensic pathology unit, Kirkpatrick noted in her letter.

"Yet two years after closing submissions were made to the Goudge inquiry on behalf of the affected families, absolutely nothing has changed for those most directly affected by the significant systemic failures identified by Justice Goudge," she wrote.