The Ministry of Defence has offered to pay more than £3m to servicemen and women who were sacked for being gay.

In 2000, the government removed the ban on gay, lesbian and bisexual people serving openly in the Armed Forces.

The MoD said that compensation for around 60 former service personnel was being paid because their privacy had been breached, and not because the Armed Forces had acted illegally in dismissing them.

Before the government removed the ban on LGB personnel, military police would mount undercover investigations and in some cases entrapment operations to rid the Armed Forces of homosexuals.

Today the Royal Navy and the Royal Air Force are members of the Stonewall Diversity Champions Scheme.

The scheme promotes best practice and gives organisations guidance and advice on how to create equality in the workplace.

American activists campaigning to remove a ban on openly gay, lesbian and bisexual personnel in the US Armed Forces often point to the positive experience the British Army, Royal Navy and Royal Air Force have had.

In a Radio 4 documentary last month, the officer responsible for equality training issued an apology to the thousands of gay men and lesbians who were discharged from the British Armed Forces because of their sexuality.

Wing Commander Phil Sagar, who runs the Armed Forces joint equality and diversity training centre, said:

“Of course we’re sorry for anyone who’s suffered personal trauma. It went from ‘You’re fired’ to ‘You’re a valued member of the team.’

“I don’t think I’d sit here and say everything’s all right because there’s obviously still work to do.

“I’ve no doubt there are people who think very carefully about what they say when asked the question ‘What did you do at the weekend?”‘