A ruling in favour of a sacked naval medical assistant, Terry Perkins, who claims Britain is breaking the EU Equal Treatment Directive, would mean the scrapping of the policy and could pave the way for a multi-million pound compensation bill for the Ministry of Defence for the thousands of homosexuals discharged from the forces over the past 20 years.
Such a ruling would also force the Government to change the law covering the private sector, creating the right for gays not to be discriminated against in employment.
In the wake of a recent European judgment giving transsexuals protection from discrimination at work, Mr Justice Lightman said the prospects of the Luxembourg court upholding Mr Perkins' complaint were "significant" and sufficient to justify a reference to Europe.
Mr Perkins, 28, was discharged in October 1995 after nearly five years exemplary service following a tip-off to the Royal Navy's special investigations branch, and is among the 100-plus homosexuals believed to be sacked because of their sexuality each year. Following service at sea he trained with the Royal Marines and gained early promotion. He now lives with his partner in Nottingham.
Mr Perkins, now a technical services consultant, praised the judge's "brilliant" ruling, adding: "I have a lot of friends in the Royal Navy who don't have a problem with it at all. I have had no negative feed-back whatsoever."
In yesterday's judgment, Mr Justice Lightman said: "Homosexual orientation is a reality today which the law must recognise and adjust to ... there must be a real prospect that the the European Court will take the further courageous step to extend protection to those of homosexual orientation, if a courageous step is necessary to do so." A ruling is expected in about 18 months.
Duncan Lustig-Prean, 37, one of four sacked gay service personnel whose cases are pending before the European Court of Human Rights in Strasbourg,said: "I am delighted we have opened our second legal battlefront in Europe and that the judge has so clearly expressed the view that the blanket ban is likely to be considered unlawful."
Nicholas Soames, the Armed Forces Minister, said: "the Government supports the armed forces in their wish to maintain [the] ban. Homosexuality is not compatible with the trust that must exist between comrades in arms ... I fear that Labour, if elected, would give up the case."
The MoD said it might argue that the ban on gays was "purely for the reason of combative effectiveness and incompatibility and that such key defence decisions are outside the scope of the EU treaty from which the directive derives and also outside the scope of the European Court of Justice."
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