Michael Adebolajo was convicted last year alongside Michael Adebowale of murdering the 22-year-old soldier, who was run over and hacked to death near Woolwich barracks, south-east London, in broad daylight in May 2013.
While he was being held at Belmarsh prison after the killing, Adebolajo had his two front teeth knocked out and claimed he had been assaulted by five prison officers.
The officers were suspended from work after the incident but were later told they had no case to answer, with the Prison Officers’ Association insisting that only approved restraint techniques had been used.
A Ministry of Justice (MoJ) spokesman said it will “robustly” defend the compensation claim, which The Sun reported could be up to £20,000.
He said: “A police investigation into this incident took place and no charges were brought against members of staff. The public will be rightly outraged at the thought of this man receiving compensation from the taxpayer and we robustly defend claims made against the Prison Service.”
But Mark Leech, editor of The Prisons Handbook for England Wales took the opposite view.
Mr Leech said: “Morally of course it is outrageous that this brutal killer should receive compensation for injuries he sustained in prison, but we do not have courts of morals in this country, we have courts of law.
“A cornerstone of English law is that if you are injured at the hands of others you are entitled to ask the court to order that you be compensated for that injury – just because a person has committed a brutal criminal offence does not make them immune from being a victim of crime in the future.”
The MoJ said it has successfully defended two thirds of prisoner claims over the last three years.
Adebolajo horrified millions of people by appearing on camera with bloodied hands clutching a knife and a meat cleaver moments after killing Fusilier Rigby, a father of one.
Adebolajo was condemned to die in prison with a whole-life jail term for the murder, while Adebowale was sentenced to life with a minimum 45 years.
At their sentencing the pair lashed out violently in the dock, screaming “Allahu Akbar” and wrestling with security guards.