The casualties of modern warfare bear more than wounds; many survivors have deep psychological scars with post-traumatic stress disorder

The Ministry of Defence is facing the prospect of paying out millions of pounds in compensation to soldiers who say they received no help in dealing with the horrors of war.

In what is believed to be the biggest group against the MoD, 280 veterans from several conflicts claim the Army failed to diagnose and treat post traumatic stress disorder (PTSD). The first cases are to be heard next year.

The MoD could be forced to pay almost unlimited amounts to compensate for trauma and loss of earnings. Solicitors believe hundreds more military personnel could join the action.

The claim will involve those who have served in virtually every recent military action involving the armed forces, including the Falklands, the Gulf, Northern Ireland, Bosnia and Kosovo. Among the claimants are 40 Welsh Guardsmen who were trapped in the shell of the warship Sir Galahad after it was attacked by Argentine planes.

John Mackensie, of London law firm Sheraffe Caleb, one of several solicitors involved in the claim, said: "The basis of the action is that the MoD and Services should have taken better steps to diagnose and treat the condition once they had acquired it.

"This is a medical negligence case. It is not about actually suffering PTSD - it is about failing to do anything about it. A soldier accepts that he might get shot in the leg but he does not accept that the Army would not treat the wound."

PTSD affects sufferers in several ways, leaving many emotionally scarred and unable to work. Some victims become violent and depressed, and a high percentage fall into alcohol abuse. The condition has only recently been accepted by doctors and academics as a genuine disorder, and was recognised by the American Psychiatric Society only in 1980.

A recent study by the department of psychological medicine at St Bartholomew's Hospital, London, and assisted by Army medics, found soldiers had a better chance of avoiding PTSD if they were given stress training and psychological debriefings.

Mr Mackensie said the claim would present evidence, including practices adopted by the Israeli military following the Six-Day War in 1967. He said the Israelis had made serious efforts to deal with the effect of stress, and set up specialist units to help its troops.

Shaun Rusling, chairman of the National Gulf Veterans and Families Association, said the MoD had repeatedly failed its soldiers - in particular by not fulfilling its promise to set up a system of diagnosis and care for the illness following the Falklands conflict.

"The result of this failure led to an increase in serving soldiers and ex-servicemen committing suicide and a clear increase in the divorce rate in service families," he said.

"More than 200 Gulf War veterans have lost the plot and are in prison. Seven out of 10 service families from the Gulf War are divorced. These are facts, not fiction. The MoD has constantly failed its employees in its care, opting to discharge rather than help those struggling servicemen."

The MoD said yesterday it would defend the claim. "The MoD believes we behaved in line with contemporary best practice in our treatment of service personnel with suspected PTSD," said a spokesman.

"The MoD has given these cases our full consideration and has been in discussions with the claimants' legal representatives to seek a way forward." The spokesman said measures had been put in place to deal with PTSD. He added: "Of course, there have been improvements in treatment over the last 20 years but we say we carried out the best contemporary practices. It is a condition which has been identified for a number of years and we have behaved in line with contemporary practice."