Gordon Brown paid tribute yesterday to the Iraqis who risked their lives working for British troops and gave special permission for some to settle in Britain, but did not say how many or how the system would work.

In a statement to Parliament, he said that the Iraqis worked in “extremely difficult circumstances” and promised that anyone employed for more than a year by the Armed Forces would automatically be entitled to financial aid for resettlement.

His announcement follows a two-month campaign by The Times for the Government to give help to hundreds of interpreters and their families who live under fear of death squads because they work with British forces.

Senior Labour MPs and human rights organisations urged the Government not to set an impossibly high hurdle for interpreters who want to settle in Britain but have already fled Iraq. There had been fears that Britain would not be as generous to its local staff as the Danish Government, which resettled in Denmark all its Army interpreters and their families.

Mr Brown said: “Existing staff who have been employed by the UK Government for more than 12 months and have completed their work will be able to apply for a package of financial payments to aid resettlement in Iraq or elsewhere or, in agreed circumstances, for admission to the UK.

“Professional staff, including interpreters and translators, with a similar length of service who have left our employ since the beginning of 2005 will also be able to apply for assistance.”

David Cameron, the Tory leader, welcomed Mr Brown’s announcement, saying:. “People who have risked their lives for Britain should not be let down by Britain.”

David Miliband, the Foreign Secretary, will announce today details of how many Iraqis will be allowed to settle in Britain. A senior Foreign and Commonwealth Office official said that the Ministry of Defence employed 500 Iraqis, but neither the Home Office nor Foreign Office were able to say how many Iraqis stood to benefit from the policy U-turn.

The Home Office had previously given warning that it would be potentially disastrous to rewrite asylum laws for one small group of people, while ignoring thousands of asylum-seekers with equally strong claims.

Keith Vaz, chairman of the Commons Home Affairs Select Committee, said it was important that the Government spelt out the circumstances for asylum as soon as possible. He said: “I have written today for clarification from the Prime Minister to check three things. Firstly I want to know they can apply from abroad, secondly the timetable and thirdly that there will be a fast-track right of appeal, with asylum adjudicators travelling to the region hear the appeals.”

Interpreters on the main British military base outside Basra and at a nearby training camp were relieved by the news. “We are really happy. We will throw a party tonight,” said Diya Khalil, whose 51-year-old father was shot dead by militiamen last year because he was an interpreter. “It is very good news for us. I feel as though I am in a dream. I am going to be able to have a new life in the UK.”

Riyad, his friend, said that the announcement meant a new life for his pregnant wife and their one-year-old daughter. “I cannot describe how I am feeling,” he said. “The Prime Minister’s words have given us freedom for ever. My family and I will be able to go outside again in safety in another country.”

The hundreds of interpreters who have worked for British Forces since the March 2003 invasion have become prime targets for Shia militias, who view them as traitors and spies who deserve to die. The militias have already kidnapped, tortured and killed scores and most of those they have not decided to quit their jobs and flee the country or go into hiding in Iraq.

A. Kinani, an interpreter whose story prompted the Government to review its policy on local staff in Iraq, regretted that the decision had taken so long.

“I am happy for the interpreters and their families but at the same time I am sad for all the interpreters who had to die before this decision was made. The British Government should have acted sooner,” he said.

Tom Porteus, the head of Human Rights Watch in London, was concerned that some Iraqis might be overlooked by the Government.

“I would like to know how interpreters now living outside Iraq can apply for help. In the past these people have been turned away from the British Embassy in Damascus," he said.

“Protection must be for all those at risk, not just some arbitrary figure conjured up in Whitehall.”

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