Campaigners criticised the Ministry of Defence today for "insulting" soldiers claiming damages for injuries by spying on them.
The MoD admitted it used surveillance tactics to investigate potentially fraudulent claims.
Since April 2000, 284 compensation claims - less than 1 per cent of those brought against the MoD - have been the subject of surveillance, the Ministry said.
Diane Dernie, mother of paratrooper Ben Parkinson, 25, who suffered horrific injuries in Afghanistan, said she was "surprised and heartbroken" to learn of the tactics being used.
She said: "I think the whole implication that there are fraudulent claims shows a complete lack of understanding on behalf of the people who are sending them out there of what the soldiers go through and what they experience.
"I have met so many of these boys now and the implication that they are not genuine is insulting.
"It insults what they do and it insults them and their families."
Mrs Dernie, of Doncaster, South Yorkshire, said the impact of physical and psychological injuries could last a lifetime, as in the case of her son, while others found their careers over as a result of being wounded.
"What about the boys whose careers are ruined, with ankle or knee injuries, who are never going to be able to be a soldier or do physical work?" she added. "Is it these people who are being spied on?
"It leaves a bad taste in the mouth."
Solicitors representing thousands of servicemen and women received letters from the MoD this week, warning them that "claims are investigated thoroughly and can involve an assessment of of the claimant's physical capability undertaken covertly by surveillance when necessary and proportionate", the Daily Mail reported.
The letter added that, where there is a "reasonable suspicion of fraud", cases are now routinely passed to the MoD police.
The MoD confirmed the letters had been sent out.
A spokesman said: "The MoD, like the insurance industry, is at risk of fraudulent claims.
"If, during the process of determining liability, evidence suggests that a claim has been exaggerated, surveillance may be used to verify details.
"It is used in less than 1 per cent of cases and should be of no concern to individuals with a legitimate claim."
In the vast majority of cases where surveillance was undertaken, the claims were found to be exaggerated, resulting in them being either repudiated or settled at a greatly reduced level of damages, he added.
The MoD said the use of surveillance had enabled it to make savings of several million pounds to the defence budget.