THE money generated from Libor fines should be used to support Gurkha veterans forced to survive without army pensions, an MP has said.

Conservative Jackie Doyle-Price, for Thurrock, said members of the all-party Parliamentary group on Gurkha welfare were "not satisfied" all of those who had served were being treated fairly.

During a backbench debate on the matter, she said: "Today's Gurkha soldiers joined the British Army on the same arrangements as British soldiers, those who served before 1997 did not.

"They claim they are not being treated equally and that there are two classes of Gurkha veteran."

Around 20,000 veterans are currently in receipt of Gurkha pensions. Established by royal warrant in 1947, the scheme was designed to give them sufficient means to live in retirement in Nepal and was paid on conclusion of 15 years service from point of exit.

Today, the income is worth around £233 a month, which Ms Doyle-Price, who is chairing the group, said could afford a good standard of living in Nepal but not in the UK.

"They [those who came to the UK] believe they should be entitled to the same level of pension as British service personnel," she added.

Of even more concern, she insisted, were 7,000 Gurkhas who served post 1947, but receive nothing because they did not complete 15 years .

Defence minister Anna Soubry said the soldiers had to be "bound by the rules of the game" and could not expect the terms and conditions of their pension schemes to be altered retrospectively. .