Navy 'has pounds 12m to meet gay challenge'

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Legal Affairs Correspondent

Gay rights activists claim that defence chiefs have set aside millions of pounds in next year's budget to meet compensation claims if the courts rule that their ban on homosexuals in the armed forces is illegal.

The gay rights pressure group Stonewall said it had seen confidential documents showing that in its latest 10-year spending estimates the Royal Navy has allocated pounds 12m for that purpose for the 1996-97 financial year. It has not seen figures for the Army and the RAF, but said the other services would have made similar provision.

The forces were embarrassed by having made no advance provision for the millions of pounds they had to pay out in compensation after court rulings that they had acted unlawfully by dismissing servicewomen who became pregnant.

But defence chiefs yesterday denied Stonewall's claims. A Ministry of Defence spokesman insisted that there was no contingency money to pay for an estimated 250 servicemen and women who are planning to claim money if the courts rule against the MoD.

In October, the Court of Appeal is due to hear a test case involving three men and a woman who were forced to leave their jobs in the armed forces because of their sexuality. Whichever side wins, the case is virtually certain to be referred to the House of Lords.

When the case first came to the High Court, Lord Justice Simon Brown said it was with "hesitation and regret" that the court decided it could not overturn the ban on gays in the armed forces. "The tide of history is against the Ministry of Defence. Prejudices are breaking down - old barriers are being removed," he said.

Later this year, a Commons select committee will reconsider the policy, which leaves Britain virtually isolated in the Western world - and the Government will decide whether to renew the ban when it passes a new Armed Forces Bill next year. Opponents claim that guidelines on appropriate conduct by service personnel would prevent any difficulties with lifting the ban on homosexuals.

The four service personnel had applied for judicial review of the ban after being forced to leave the forces despite impeccable service records.

Service chiefs argue that homosexuality could corrupt young soldiers, and undermine morale and efficiency.

Armed Forces ministers recognised that the judges were calling for a review of the system, and pledged to study what they had said very carefully.

However, the Ministry of Defence said yesterday that it would not be taking any action or review before the Court of Appeal hearing.