Gurkha accused points finger at Cherie Blair

She is the one who is really profiting from veterans' plight, says former welfare official

An official from a welfare group at the centre of the bitter controversy over Gurkha veterans being charged cash for advice on settling in Britain has accused Tony Blair's wife of making money from the former soldiers.

The Gurkhas were awarded legal aid for their dispute with the British government, but it was set to cover only part of the legal fees, and Padam Bahadur Gurung of the Gurkha Army Ex-Servicemen's Organisation (Gaeso) claims that the veterans have now been billed £147,230.78 for the rest.

Speaking publicly for the first time, Mr Gurung told The Independent that he and his associates denied taking £500 each from around 4,000 veterans for advice on how to settle in Britain.

He said large sums of money had been claimed by Cherie Booth QC and the prominent civil rights solicitor Phil Shiner in cases which had been partly covered by legal aid. He said the organisation had a letter from Mr Shiner demanding £147,230.78 in payment.

Gaeso itself is now split, with a breakaway faction demanding that Mr Gurung and his associates account for the £2m they have allegedly collected from the Gurkhas. Mr Gurung accused the MoD and a former legal adviser to the organisation, Gopal Siwakoti Chintan, of vilifying the organisation and Ms Lumley to prevent it from continuing to fight for Gurkha rights.

He said: "Gaeso has remained silent in face of severe and unsubstantiated criticism prompted mainly by the MoD and Siwakoti... We are now ready to expose these lies.

"The MoD had never called for an investigation into our alleged malpractice until [the minister for Veterans] Kevan Jones smeared Joanna Lumley and her Gurkha Justice Campaign in front of the British Parliament."

He continued: "The only time Gaeso raised money from its members was for the Gurkha pensions case. Siwakoti orchestrated an arrangement with Phil Shiner and Cherie Booth for the case, even though it was supposed to be funded under legal aid.

"Gurkhas were still required to pay Cherie Booth, Phil Shiner and Siwakoti's legal fees... Indeed, there is a letter from Phil Shiner which states that Gaeso were required to pay an outstanding £147,230.78."

A spokeswoman for Cherie Booth at Matrix Chambers referred Mr Gurung's allegations to Mr Shiner. Mr Shiner, who has pursued a number of high-profile cases against the MoD, said: "To imply that I have been involved in some kind of conspiracy with the MoD against Mr Gurung and Gaeso is ridiculous. I might as well be accused of having sex with a donkey."

Mr Shiner acknowledged that he had charged the organisation money, but explained: "Although we did get legal aid funding, the ruling was that Gaeso should themselves make a part-contribution towards the cost.

"I continued working for Gaeso on other cases afterwards, and what I charged them related to those matters as well. Every single pound, every single penny, was accounted for. To bring this up now is an attempt by Mr Gurung to muddy the waters. I gather that he is facing some pretty serious allegations himself and he seems to be trying to deflect focus from that."

An inquiry ordered by Mr Jones into fees being charged over advice to Gurkhas cleared Howe & Co, a firm of London solicitors dealing with Gurkha rights, of any wrong-doing.

An MoD spokesman said: "We have opened a Gurkha settlement office in Nepal which is offering ex-Gurkhas education about life in the UK and free help with visa applications."