The announcement was seized upon by campaigners seeking compensation for victims of the so-called Gulf War Syndrome, as evidence that the MoD was responsible for bringing on their illnesses.
Huge quantities of chemicals were sprayed from planes on to the tents where British troops were living, to give protection against diseases carried by mosquitoes and sand flies.
Since the end of the conflict, 750 serving and former British soldiers have complained of illness, with symptoms including chronic depression, lack of energy and physical pain.
Yesterday, in a letter to Michael Colvin, chairman of the Commons defence committee, Nicholas Soames, Minister of State for the Armed Forces, said: "It has become clear that organophosphate pesticides (OPs) were used more widely in the Gulf than we had previously been led to believe. This arose because of the understandable difficulties in getting sufficient supplies of pesticides delivered to the Gulf theatre in the early stages of the operation."
Hilary Meredith, a Manchester solicitor representing many claimants, immediately accused the Government of covering up the use of OPs for five years.
She said: "During the course of litigation we will be able to prove that the MoD knew the extent of OP use in the Gulf as long ago as 1991. We have MoD documentation to prove it and we will be disclosing it during litigation."
In his letter, Mr Soames added: "We wish to know whether any of the Gulf veterans may be ill as a result of exposure to organophosphates so that we can ensure that they are receiving the most appropriate treatment."
However the MoD does not accept the existence of a single illness which could be described as "Gulf War Syndrome".
OPs are now less widely used than they were at the beginning of the 1990s. During the war, large quantities were bought by the British and American forces locally, mainly in Saudi Arabia, to deal with swarms of flies in the marshy areas on the coast and in southern Iraq.
Pesticides manufactured in developing countries have often been found to contain impurities which make them more dangerous. Pesticide poisoning is far more common in the Third World than in the West.
A soldier's story, page 3