'Bigger payouts' for injured forces

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General Sir David Richards, commander-in-chief of land forces, claimed ministers "share the view that the compensation package is not quite right".

Speaking to the Sunday Telegraph, he added: "I can reassure you that there is an acceptance in the Ministry of Defence, not just in the military, that this whole area needs re-examination."

His comments follow concern at the levels of compensation paid to service personnel who have lost limbs and sustained other life-changing injuries in Iraq and Afghanistan.

But the Ministry of Defence said its position had not changed.

In a statement, Defence Secretary Des Browne said the Government had a duty to look after injured soldiers.

"For the first time, the Armed Forces Compensation Scheme introduced a tax-free lump sum together with monthly tax-free and index-linked payments for life for the more seriously injured.

"Over a lifetime this can amount to many hundreds of thousands of pounds.

"We have kept the system under review - and will continue to keep it under review.

"I want to reassure the families of our brave injured service personnel that we will continue to honour the sacrifice that they have made."