More than a thousand claims collapsed without a single prosecution because of “a lack of credible evidence”.
But figures obtained by The Sun show the Ministry of Defence settled hundreds of unproven claims out of court.
Most of them were brought by tank-chasing British lawyers.
In one case, the MoD paid £145,000 to settle an alleged murder claim — only for the troops involved to be fully exonerated by a judge-led inquiry.
“Instead of protecting their soldiers, the MoD protected itself,” said Major Robert Campbell, who was one of three soldiers falsely accused of drowning an Iraqi looter, Saeed Shabram, in Basra in 2003.
An inquiry concluded last month that claims against him were based on lies, collusion and a possible conspiracy.
Figures show the Government paid £19,860,640 to settle 330 claims.
The money is enough to pay 999 troops’ wages for a year.
Another 414 claims are active and due to be settled.
Just 217 were withdrawn or thrown out.
Responding to a Freedom of Information request, the MoD said most of the payments were out-of-court settlements made without admission of liability.
A spokesperson said: “The vast majority of UK personnel conducted themselves to the highest standards in Iraq.
“We continue to vigorously defend opportunistic claims against them to protect troops and reduce the burden on the taxpayer.”
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