£2m for Iraq man shot by UK soldier

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The Ministry of Defence confirmed a Channel 4 News report that the man - who cannot be named for legal reasons - was set to receive the payout after suffering severe spinal injuries which left him paralysed. The final settlement is awaiting a further High Court hearing.

The sum is far higher than anything paid to any British troops injured in Iraq and is likely to reopen the controversy over the compensation levels for wounded service personnel.

There were also fears among opposition MPs that it could set a precedent, opening the way for further big compensation claims by Iraqis against the British Government.

The MoD insisted that the case was a one-off.

"It is not a precedent, it is an exceptional case. It is not expected that there are any other cases of such severity," a spokesman said.

The MoD also rejected comparisons with the Armed Forces Compensation Scheme for injured troops, which offers a maximum lump sum payment of £285,000.

The spokesman said that it was a no-fault scheme, which also provided a lifetime income for those who were covered.

In the case of the Iraqi man, the high payout reflected both the costs of caring for him for the rest of his life and the fact that the MoD had accepted that the shot which injured him was a "negligent discharge".

The man was wounded in September 2003 when a British soldier - one of a group who he had befriended - accidentally dropped his gun and the weapon went off.