Personnel in Iraq and Afghanistan will benefit from the rebate

Soldiers will be given a 25% rebate on the average bill - which works out as �140 for a six-month tour of duty.

The Ministry of Defence, which has recently been criticised by Army chief Gen Sir Richard Dannatt, will pay for the tax relief out of its own budget.

The Tories accused PM Gordon Brown of "bouncing" the MoD into providing good headlines for the government.

In his speech to the Labour Party conference, Defence Secretary Des Browne said those on the most dangerous operations would get the discount first but it would be expanded to everyone on overseas operations within a year.

'A disgrace'

About 13,000 soldiers will benefit from the tax rebate, which amounts to 25% of the average council tax bill.

The payments will be given only to personnel who pay tax on a UK property - excluding those who live in army accommodation.

Mr Browne also announced an additional �80m to be invested in barracks accommodation - after admitting some of it was "a disgrace" - which he attributed to decades of under-funding.

HAVE YOUR SAY If they are working offshore they should be completely tax free just like UK civilians! Ian Simpson, Lancaster Send us your comments

He said there would be changes to allow veterans and their families access to social housing in areas they had been based and he said mental health care would be expanded across the country.

"They are looking after us, we need to look after them," he told delegates.

"We mourn their loss but we also remember their courage and their bravery.

"We must from this conference send a message that we intend to honour our debt to them."

Budget pressure

The Conservatives said the council tax rebate would be "divisive" and accused Mr Brown of pressurising the MoD.

"This has all the hallmarks of the MoD being bounced into giving a good headline to Number 10," said shadow defence secretary Liam Fox.

"The nature of this measure will be divisive amongst the armed forces because it discriminates between personnel on different operations.

I think throughout the armed forces, it will be welcomed with a slightly wry smile and a degree of cynicism Crispin Cuss Former Army officer

"It will put further pressure on the frontline budget because no new money is being made availble to the MoD."

The government has been accused of giving inadequate treatment to soldiers sent to the frontline - particularly on accommodation and healthcare for wounded soldiers.

Crispin Cuss, a former Army officer who has served in Iraq, told the BBC that some service personnel would remain sceptical about the rebate.

"I think throughout the armed forces, it will be welcomed with a slightly wry smile and a degree of cynicism", he said.

"I think the people who receive it - and those who aren't receiving it - will see it as an empty political gesture."

Last week the head of the Army, Gen Dannatt, suggested the attitude of the UK public could also sap the willingness of Britons to serve in the armed forces.