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Compensation for LGBT veterans who faced mistreatment in the military will begin in January, a defence minister has announced.

The government will start a £50m financial redress scheme for victims of the pre-2000 "gay ban" in the military next year, Veterans Minister Al Carns said.

The announcement follows last year, which revealed decades of bullying, assaults and expulsions of LGBT military members - often leaving them without income or pensions.

Carns told the House of Commons "the treatment of LGBT veterans was completely and utterly unacceptable".

Homosexuality was decriminalised in the UK in 1967, but a ban continued in the armed forces until 2000.

The Ministry of Defence said at the time that justification for the policy included "maintenance of operational effectiveness and efficiency".

But Lord Etherton's report said there had been an "incomprehensible policy of homophobic bigotry" in the armed forces.

Lord Etherton, Britain's first openly gay senior judge, found there was a culture of overt homophobia in the forces - enforced through bullying, blackmail and sexual assault.

Many gay service personnel were dismissed, lost out on job opportunities, and were shunned by families and friends.

On the release of Lord Etherton's report in July 2023, then prime minister Rishi Sunak apologised in Parliament, calling the ban “an appalling failure" of the British state.

The report made 49 recommendations to the government including:

Speaking in the Commons, Carns said the government had "met 32" of the recommendations and "will meet the financial redress scheme by the end of this year with the launch in January next year".

Carns added that the Ministry of Defence was "working with experts across government to establish an appropriate financial redress scheme".

Labour backbencher Chris Ward said there was "concern among veterans" about the impact of the cap on payments.

Veterans' charities have warned it will mean the actual amount of compensation will not be enough.

A National Audit Office report found up to 4,000 veterans were likely to be eligible for compensation, meaning the average payout could be about £12,500.

Some LGBT veterans awarded a special badge to mark the injustice they faced told the ³ÉÈËÂÛ̳ they would refuse to wear it until the government payed them compensation.