An industrial tribunal of a Gurkha living in Wales who is claiming racial discrimination by the Ministry of Defence started on Monday.

Former Lance Corporal Hari Thapa says he has been discriminated against after receiving British Army pay and a pension at a much lower level than a British soldier.

Mr Thapa claims payments were discriminatory

Mr Thapa, who retired to Cwmbran, south Wales, receives a pension of �58 a month, but he alleges a British soldier of similar service would receive �500.

The tribunal, in Cardiff, is expected to last three days but any decision may not be made until 2005.

More cases

If Mr Thapa is successful, his case could open the door for similar cases by ex-Gurkha servicemen and widows, costing the UK Government up to �2bn.

Mr Thapa was given exemplary discharge from the Army five years ago.

In the 15 years he served, he was paid �43,000 less than other soldiers.

Long wait

Mr Thapa, a British passport holder stationed at Brecon, was angered by the MoD's basic salary rate of �17.50 per month during service and the �58 pension he received after discharge in 1997.

Gurkha troops are known for their distinctive uniform

He was recruited to the armed forces under a 1947 tripartite agreement between the UK, India and Nepal, which links Gurkhas' pay and pensions to those in the Indian Army.

But the MoD has always insisted the payments were adequate because most Gurkhas retired back to Nepal, where the cost of living was considerably less than in the UK.

Victory at the tribunal in Cardiff could spark a flood of claims from up to 30,000 Gurkhas and 6,000 widows.

The MoD was accused in February of "delaying tactics" by the tribunal's chairwoman, Dr Rachel Davies.

She said: "We have considerable sympathy with Mr Thapa. He has waited a long time for this procedure and he may have to wait longer.

'Unreasonable'

"He has been the victim of an internal redress procedure which appears to us to be either inefficient or unwilling or absurdly cumbersome."

She added: "In our view the MoD's conduct of the tribunal litigation has been so unreasonable as to have constituted an abuse of process.

"The MoD has abused the extensions which have been granted by the tribunal by failing to keep them within reasonably confines."

A spokesman for the MoD said: "The MoD may have incurred delays but there have been equal delays caused by both sides."

Backing

Mr Thapa's case is being backed by the Commission for Racial Equality, which said the Ministry of Defence's responsibilities under the Race Relations Act 1976 outweigh the terms of the tripartite agreement.

But the MoD claims the Act does not cover the Gurkhas as they are recruited and discharged in Nepal.

The tribunal will analyse thousands of pages of documents, Acts of Parliament dating to the 17th Century and the constitutional position of the Army.