This study is being conducted to compare the safety, effectiveness and tolerance of valopicitabine (NM283) when used alone and when valopicitabine is used together with pegylated interferon in hepatitis C treatment failure patients. These results will be compared against the results of treatment with pegylated interferon plus ribavirin, the current standard therapy for treatment of hepatitis C viral infection.

Inclusion Criteria:

• Documented clinical history compatible with chronic hepatitis C and compensated liver disease
• Failed response to previous hepatitis C therapy of pegylated interferon/ribavirin

Other protocol-defined inclusion criteria may apply.

Exclusion Criteria:

• Patient is pregnant or breastfeeding
• Patient is co-infected with hepatitis B or HIV

Other protocol-defined exclusion criteria may apply.