Nine Iraqis who were assaulted and sexually abused by British soldiers while being held at an army camp are to receive up to £1m in damages after the Ministry of Defence admitted liability.
It is the second big payout by the Army this year over allegations of abuse in the aftermath of the invasion of Iraq in 2003.
Government lawyers agreed in July to pay almost £3m in compensation to the father of an Iraqi man, Baha Mousa, who died in the custody of British troops in Basra, and to nine others who were abused in a detention centre in Basra in September 2003.
In the latest case, nine more Iraqis made allegations of "humiliating" abuse after they were arrested by the 1st Royal Regiment of Fusiliers in Operation Ali Baba, which was aimed at catching and deterring looters who were stealing humanitarian aid from a British Army camp.
Four soldiers were convicted at courts martial in Germany 2005 of offences at Camp Breadbasket after photographs emerged of Iraqis being abused, including being suspended in nets from a forklift truck, and forced to adopt simulated sexual positions.
No one was charged in connection with forcing Iraqis to simulate sex acts and give a thumbs-up for the camera, despite months of investigation by the Royal Military Police.
The MoD admitted yesterday that unlawful "assaults and batteries" were suffered by nine Iraqi men claiming damages for abuse by members of the Royal Regiment of Fusiliers in May 2003. Sapna Malik, a partner at Leigh Day & Co solicitors who are representing the men in their claims against the MoD, said: "It is good that the MoD has admitted that the treatment received by each of the claimants was unlawful, although its refusal to accept that Camp Breadbasket falls within the ambit of the Human Rights Act is frustrating. The maltreatment of the men was hideous, humiliating and degrading and the legacy lingers with them to this day.
"We hope that the admission marks the MoD's willingness to resolve the claims fairly so that the men can try to finally move forward with their lives."
However, it is understood that the MoD has requested further details of the abuse, including medical reports and witness statements before making any payouts. The MoD has also denied that the Human Rights Act or European Convention on Human Rights extended to the humanitarian aid distribution centre where the abuses occurred.
An MoD spokesman said: "This claim is currently subject to litigation and therefore it would be inappropriate to comment on the specific aspects of this case. The MoD settles compensation claims when there is a legal liability to do so. Such liability does not exist during the combat phase of an operation, but compensation is paid where it is judged that UK armed forces have been negligent in causing injury or damage post cessation of hostilities.
"Over 120,000 British troops have served in Iraq and the vast majority have conducted themselves to the highest standards of behaviour, displaying integrity and selfless commitment."