Mr Dolan said: "I have been fighting for an inquiry into cases of Hepatitis C and HIV since concerns were first raised more than 20 years ago.
"It is a really chilling fact that even since we started lobbying the Scottish Parliament in 1999, many of those who fought alongside me have died, or are seriously ill through Hepatitis C or HIV.
"It is refreshing that Nicola Sturgeon has now honoured the commitment she gave us last August to hold a public inquiry.
"But it must be fully funded to make sure that all the victims and those whose family members have died, or are waiting for liver transplants can be properly represented."
Solicitor Advocate Frank Maguire of Thompsons Solicitors who has fought for a public inquiry on behalf of his clients who are victims of Hepatitis C or HIV said:
"I welcome the fact that this will be a full judicial inquiry, led by a Court of Session Judge who will have the power to order witness to appear and documents to be produced.
"Lady Cosgrove will have the powers to follow the trail where-ever it may lead, and one place it will certainly lead is to the Department of Health in London.
"Although this is a Scottish inquiry there must be no obstruction. The Department of Health in London must cooperate fully or we will be going back to Lord MacKay for another judicial review.
"Although a lot of these events happened in the past it is still very much a live issue.
"I am concerned with the fall-out from an incident like this. So the inquiry has to look, not just at the causes, but at the fallout of how the system coped when the scale of problem was realised.
"People are dying from liver cancers and are on waiting lists for liver transplants to this day and more are coming forward every day.
"Why has it taken so long for them to be identified, because the longer Hepatitis C remains in the blood the more potentialy lethal damage it causes and the greater the risk of cross infecting partners.
Mrs Roseleen Kennedy whose mother Eileen O'Hara is one of the victims said: "My sister Annette and I are really pleased that the official announcements specifically mentions that our mother's death and that of the Rev Black will be fully investigated.
"We have always been driven the need to find out what went so disastrously wrong that our mother died after receiving simple blood transfusions.
"But we are also pleased that the inquiry will investigate all the other issues and provide answers for the thousands of families who have suffered as we have."
In a statement to the Scottish Parliament Cabinet Secretary for Health and Wellbeing Nicola Sturgeon said the decision fulfilled a manifesto commitment and was a victory for campaigners who had spent more than 15 years pursuing an inquiry.
The Right Honourable Lady Cosgrove will chair the inquiry, which will investigate the deaths of Rev. David Black and Mrs Eileen O'Hara and will meet the obligations of Scottish Ministers and the Lord Advocate under Article 2 of the European Convention of Human Rights. This will comply with Lord Mackay's recent determination in relation to those cases.
The inquiry will also investigate more generally the circumstances in which Hepatitis C and HIV were transmitted through NHS treatment with blood and blood products in Scotland.
This is a complex issue with numerous strands which may include:
The sources of blood and blood products used by the NHS in Scotland at the time
The demand for blood products in Scotland; including factor Eight for haemophiliacs
The introduction in Scotland of heat treatment for blood and blood products and whether this could have taken place earlier
The introduction in Scotland of effective screening of blood donations for the Hepatitis C and HIV viruses and whether relevant tests were put in place
The Scottish National Blood Transfusion Service's practices at the time.
However, it will be for Lady Cosgrove to develop the shape of the inquiry. The final terms of reference of the inquiry will be announced in due course, following further discussions and agreement between Scottish Ministers and Lady Cosgrove.