Lieutenant Colonel Mark McKinney, who served in Northern Ireland, Sierra Leone and Iraq, says he was refused a court martial or any similar hearing, despite repeatedly asking for one, in contravention of his entitlement under the Human Rights Act.
The 47-year-old, who was voluntarily running deer management services for the Ministry of Defence, had complained to senior commanders, including Timothy Laurence, husband of the Princess Royal, that money was being needlessly spent hiring private contractors to assess deer populations on MoD land in Scotland, which his team could do for free.
But the officer with an honours list award for bravery was dismissed as staff officer for civil military co-operation in the Royal Marines Reserve, after complaining that his grievances, first aired six years ago, had been ignored.
He said: "It's all because the royal family is involved. As soon as you mention the royal family then all the rule books are thrown out the window.
"I served my country since I was 19 years old and they have completely destroyed me for trying to do the right thing. I have felt utter humiliation and devastation to be dismissed after 28 years' service, seven operational tours and an award for bravery.
"This is something you would expect in a tinpot dictatorship. I think even President Mugabe [of Zimbabwe] would feel a bit uncomfortable about this one."
Mr McKinney, who was also a self-employed UK agent for the South Africa-based security firm, Ronin Protective Services, says in a statement to an industrial tribunal, which is expected to begin next month, that he and another serviceman were intimidated and discriminated against.
His statement said he believed "none of the correct MoD investigative procedures was carried out".
"To do so would have implicated, and indeed involved, Vice Admiral (Retd) TJH Laurence [former chief executive of Defence Estates] which, as a member of the royal family, would have been very embarrassing for all concerned," he added.
The allegation over public funds related to £1600 being used to pay a private contractor for a survey of deer populations on MoD land, which the soldier believed was part of a plan – later aborted – to privatise the running of 63 deer sites across the UK.
Surveys at all the sites would have cost more than £100,000.
After expressing his concerns in a letter to First Sea Lord Admiral Sir Mark Stanhope in May, 2011, that he had been at the receiving end of "threatening behaviour" and a deliberate refusal to investigate, he received a communication that his complaint was considered "insubordinate" and that his manner amounted to gross misconduct.
The soldier from Dunning, Perthshire, said of his letter to the First Sea Lord Admiral: "I was so frustrated I told him 'do the right thing, or stand down'."
However, the officer, who was awarded the Queen's Commendation for Valuable Service in 2005 following his service in Liberia, was asked to attend a meeting where he suffered "the ultimate indignation and ignominy of being summarily dismissed."
Mr McKinney, who left the regular Marines after 17 years' service but later was a reservist, is supported by his local MP, Gordon Banks, who said: "It seems to me that because he felt things were not being handled correctly there's been a series of pressures applied on anything to do with Mark McKinney because he has rocked too many boats.
"Mark's failing seems to be he has had the balls to stand up and say something about it and bring it to his superiors' attention."
An MOD spokesman said: "Mr McKinney's case is subject to ongoing employment tribunal proceedings and it would therefore be inappropriate for us to comment further."