The Ministry of Defence is to appoint an independent adviser to investigate whether separate chemical trials, involving zinc sodium sulphide, could be responsible for the high incidence of learning difficulties and physical handicaps in East Lulworth, Dorset.
Documents released in 1997 showed that large quantities of bacteria, including a strain of E. coli, were sprayed along the Dorset coast during the 1960s and early 1970s as part of secret germ warfare tests by the MoD.
The ministry has also admitted that it carried out chemical warfare trials using zinc cadmium sulphide between 1957 and 1963 along the British coast.
The MoD has denied that the tests were harmful but some experts fear substances could have entered the food chain through the soil or combined with other bacteria to produce lethal organisms.
The residents of East Lulworth want a public inquiry into the effects of the chemical and germ warfare trials. They claim their own research shows that women who grew up in the village have suffered three times as many miscarriages as outsiders and the number of children born with learning difficulties or physical handicaps is twice the national average.
David Orman's wife, Jeanette, grew up in East Lulworth. She suffered a miscarriage and gave birth to a son, Ashley, with cerebral palsy. Jeanette has now been sterilised because she fears giving birth to another disabled child.
Mr Orman researched the medical histories of 15 women who all grew up in the village during the time the trials were taking place. As a group, the women suffered 14 miscarriages and one still birth as well as giving birth to five children with physical disabilities and two children with learning difficulties. "We just want to know why our children have been affected," he said.
The study, by Dorset Health Authority, concluded that there was no evidence of a "cluster" in the village and ruled out any link with the germ warfare tests.
"Of course we sympathise with the people involved," said spokeswoman Pauline Chudley. "But we have narrowed the extent of disabilities down to a few families and this does not constitute enough to be classed as a cluster. We will interview some families in more detail, but our research shows that the number of miscarriages is below the national average in the sample we studied."