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Nine Iraqi civilians who were abused by British troops have been awarded almost £1 million in compensation, it can be revealed.
The disclosure has led to claims that a compensation culture has been created where Iraqi civilians are now encouraged by British lawyers to bring actions against the government in the hope of winning huge payouts.
MPs and senior officers last night said that while civilians abused by British soldier rightly deserved to be compensated, the sums being were "offensively disproportionate" to the amounts being paid to Britain's war injured.
The latest award follows the £2.82 million paid to the family of Baha Mousa, an Iraqi hotel worker and suspected insurgent, who died from injuries sustained while in British custody.
A public inquiry into the death of Mr Mousa, who sustained 93 separate injuries while in the custody of the now disbanded Queen's Lancashire Regiment, has also cost more than £3 million, even though no evidence has yet been heard.
Last November the MoD also paid out £200,000 in compensation to the families of two Iraqis who alleged that they had been chased into a river by British troops. One of the Iraqis died in the incident.
The latest MoD payment relates to offences committed by British troops at a British logistics depot known as "Camp Breadbasket", in southern Iraq in May 2003.
The base, a distribution centre for food, water and medical supplies, had been persistently targeted by Iraqi looters.
Acting under orders from a senior officer, soldiers from the 1st battalion the Royal Regiment of Fusiliers took part in what was dubbed "Operation Ali Baba" and rounded up around 20 alleged looters who had been attempting to steal food and aid from the camp.
The orders from the officer in charge was to "work them (the looters) hard". But the civilians were beaten, forced to simulate sex acts and one individual was suspended in a net from a forklift truck.
Others were made to pick up rubbish, carry heavy loads and some were doused with dirty water.
Details of the abuse emerged after Fusilier Gary Bartlam, who took part in the incident, attempted to get "trophy" photographs of the incident developed in the UK.
During two separate courts martial, Bartlam and three other soldiers were jailed and dismissed from the Army.
The scandal marked a low point for the reputation of the British Army in Iraq and lead to apologies from the Ministry of Defence and senior commanders.
The £940,000 paid out to the nine Iraqis will give them a millionaire lifestyle in their home country when the differences in the cost of living between the UK and Iraq is taken to account.
Many senior officers are privately furious at the size of the payouts.
Under a tariff system operated by the MoD's Armed Forces Compensation Scheme, payments to injured British troops are capped at £570,000.
LCpl Ben Parkinson, who lost both legs and suffered brain damage after being blown up in Afghanistan, received just £151,000 in compensation from the MoD.
After a campaign by his mother Diane, the amount was increased to £285,000 and then to £570,000. The vast majority of troops who have so far been injured in Iraq and Afghanistan will receive much less than the maximum tariff.
Diane Dernie, Ben's mother said the size of the damages paid to the Iraqis left her feeling deeply despondent.
Mrs Dernie, who has been forced to give up her job to care for her son, added: "I don't understand how there can be such a discrepancy between a civil case and what's due to boy's like Ben who are injured serving their country.
"It is very hard to bear. People are sick of seeing huge sums awarded for what seems like the wrong reason when soldiers who have lost everything get such small amounts for the right reasons.
"But I'm not angry, just despondent. This makes me feel that Ben's life is not worth as much as other people and on top of an already terrible situation that is very hard. "
One senior defence source said: "It is quite right that the Iraqis should be compensated.
"What happened to them was despicable. But look at the size of the awards and compare those to what soldier's such as Ben Parkinson have received – it is disproportionately offensive.
"It can't be right that someone who was humiliated is effectively given a bigger pay out than someone who has lost both legs and suffered brain damage."
Patrick Mercer, the MP for Newark and a former infantry officer, added: "The disparity between these claims and those which have been received by servicemen with very serious injuries is very hard to understand.
"Certainly the Iraqis must be compensated but there must not be this degree of disparity between these claims and those of our fighting forces."
An MoD spokesperson said: "Claims submitted in respect of this case were settled out of court on an amicable basis. The terms of that settlement are confidential between the parties concerned.
"We must never forget that well over a hundred thousand of our personnel have served in Iraq, with bravery and distinction.
"Only a tiny number have fallen short of the Army's high standards, but even a tiny number is unacceptable and we must understand as fully as possible what happened and learn lessons from this incident."
The disclosure has led to claims that a compensation culture has been created where Iraqi civilians are now encouraged by British lawyers to bring actions against the government in the hope of winning huge payouts.
MPs and senior officers last night said that while civilians abused by British soldier rightly deserved to be compensated, the sums being were "offensively disproportionate" to the amounts being paid to Britain's war injured.
The latest award follows the £2.82 million paid to the family of Baha Mousa, an Iraqi hotel worker and suspected insurgent, who died from injuries sustained while in British custody.
A public inquiry into the death of Mr Mousa, who sustained 93 separate injuries while in the custody of the now disbanded Queen's Lancashire Regiment, has also cost more than £3 million, even though no evidence has yet been heard.
Last November the MoD also paid out £200,000 in compensation to the families of two Iraqis who alleged that they had been chased into a river by British troops. One of the Iraqis died in the incident.
The latest MoD payment relates to offences committed by British troops at a British logistics depot known as "Camp Breadbasket", in southern Iraq in May 2003.
The base, a distribution centre for food, water and medical supplies, had been persistently targeted by Iraqi looters.
Acting under orders from a senior officer, soldiers from the 1st battalion the Royal Regiment of Fusiliers took part in what was dubbed "Operation Ali Baba" and rounded up around 20 alleged looters who had been attempting to steal food and aid from the camp.
The orders from the officer in charge was to "work them (the looters) hard". But the civilians were beaten, forced to simulate sex acts and one individual was suspended in a net from a forklift truck.
Others were made to pick up rubbish, carry heavy loads and some were doused with dirty water.
Details of the abuse emerged after Fusilier Gary Bartlam, who took part in the incident, attempted to get "trophy" photographs of the incident developed in the UK.
During two separate courts martial, Bartlam and three other soldiers were jailed and dismissed from the Army.
The scandal marked a low point for the reputation of the British Army in Iraq and lead to apologies from the Ministry of Defence and senior commanders.
The £940,000 paid out to the nine Iraqis will give them a millionaire lifestyle in their home country when the differences in the cost of living between the UK and Iraq is taken to account.
Many senior officers are privately furious at the size of the payouts.
Under a tariff system operated by the MoD's Armed Forces Compensation Scheme, payments to injured British troops are capped at £570,000.
LCpl Ben Parkinson, who lost both legs and suffered brain damage after being blown up in Afghanistan, received just £151,000 in compensation from the MoD.
After a campaign by his mother Diane, the amount was increased to £285,000 and then to £570,000. The vast majority of troops who have so far been injured in Iraq and Afghanistan will receive much less than the maximum tariff.
Diane Dernie, Ben's mother said the size of the damages paid to the Iraqis left her feeling deeply despondent.
Mrs Dernie, who has been forced to give up her job to care for her son, added: "I don't understand how there can be such a discrepancy between a civil case and what's due to boy's like Ben who are injured serving their country.
"It is very hard to bear. People are sick of seeing huge sums awarded for what seems like the wrong reason when soldiers who have lost everything get such small amounts for the right reasons.
"But I'm not angry, just despondent. This makes me feel that Ben's life is not worth as much as other people and on top of an already terrible situation that is very hard. "
One senior defence source said: "It is quite right that the Iraqis should be compensated.
"What happened to them was despicable. But look at the size of the awards and compare those to what soldier's such as Ben Parkinson have received – it is disproportionately offensive.
"It can't be right that someone who was humiliated is effectively given a bigger pay out than someone who has lost both legs and suffered brain damage."
Patrick Mercer, the MP for Newark and a former infantry officer, added: "The disparity between these claims and those which have been received by servicemen with very serious injuries is very hard to understand.
"Certainly the Iraqis must be compensated but there must not be this degree of disparity between these claims and those of our fighting forces."
An MoD spokesperson said: "Claims submitted in respect of this case were settled out of court on an amicable basis. The terms of that settlement are confidential between the parties concerned.
"We must never forget that well over a hundred thousand of our personnel have served in Iraq, with bravery and distinction.
"Only a tiny number have fallen short of the Army's high standards, but even a tiny number is unacceptable and we must understand as fully as possible what happened and learn lessons from this incident."
