The out-of-court settlement is the end of a legal battle that has lasted more than two years for Lorna Partridge, whose husband, Tony, was crushed by a container blown over by the downwash from a Chinook helicopter.
But she and Mr Partridge's parents remain angry at the way they have been treated by the ministry. They say they have been denied information and that the legal dispute was unnecessarily prolonged.
'I am not happy with the settlement but at the end of the day I had no option but to accept it,' Mrs Partridge, 28, who lives near Dunfermline in Fife, said. The couple's son, Danny, is now three years old.
Mr Partridge, 26, a Leading Physical Instructor, was killed in October 1991 as the Chinook was delivering fuel containers to the adventure training centre at Shag Cove on West Falkland, which can only be reached by helicopter.
The underslung fuel pods began to roll over as they touched the ground and so the Chinook, piloted by Flt Lt David Stewart, lifted up.
This increased the downwash - the wind created by the helicopter's rotor blades that fans out at ground level - which rocked a two-ton container that was near the landing pad.
Mr Partridge, chief instructor at the centre, and two students were sheltering from the downwash behind the container. It began to roll down the slope and Mr Partridge was crushed as the others jumped clear.
An internal inquiry by the Ministry of Defence concluded that the accident could have been prevented.
The inquiry report said: 'Undeniably, there were failings in management and not least in that some longstanding weaknesses in organisation went uncorrected.
'The container had been placed on sloping ground at Shag Cove on a hummock, and had subsequently been moved by dragging. These factors combined to allow the container to teeter, and eventually roll, under the effect of the Chinook downwash.'
The victim's father, Fred, who with his wife, Jill, runs a village shop near Spalding in Lincolnshire, said: 'We have had so many conflicting stories and nobody would tell us the truth.'
He obtained a copy of the internal report only after he spotted a small item in a Royal Navy newspaper which stated that such documents could be requested. Nobody at the ministry volunteered the information that he was entitled to see it.
It took 18 months for a full inquest to be held because the ministry said that it was difficult to get all the witnesses together. Nicholas Gardiner, the Oxfordshire coroner, recorded a verdict of accidental death.
Mr Partridge said: 'We have to fight tooth and nail for everything we have got out of the MoD. We have never been given anything, we have just come up against blank walls. We have been treated very, very coldly.'
His daughter-in-law indicated her willingness to accept pounds 120,000 last summer but the ministry, which had admitted liability, continued to haggle. This hardened her attitude and in the end the ministry had to pay out more.
She said: 'It is like a game of cat and mouse with them. We could have settled this a long time ago, when I was willing to accept less than I am willing to accept now.'
The accident inquiry recommended a set of guidelines to prevent such an incident occurring again. A spokesman for the ministry said: 'We have reached an amicable settlement with Mrs Partridge's solicitor.'
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