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And even more incredibly begin paying him and his law firm Public Interest Lawyers hundreds of thousands of pounds to accompany clients to interviews, held in Lebanon and in Turkey.

At least one of Shiners agents Abu Jamal was also paid more than 100,000 by Ihat while also being paid by Shiner.

The MoD privately accepts that the cases involving Shiner are now tainted as a consequence.

The Telegraph can also disclose that Red Snapper, the recruitment company that supplied almost 130 private investigators to Ihat, is expected to be paid almost 5 million this year - even after the inquiry is wound up.

An Ihat spokesman said Red Snapper had a contract to supply staff to Ihat that runs until January 31 2018.

The contract is worth 4.8 million a year. The MoD, which funded Ihat, will now have to explore break clauses in the contract.

An Ihat spokesman said it was too soon to say how much Red Snapper would receive in the lead up to the shut down of the Iraq investigation.

The Telegraph previously disclosed how Red Snappers founders the husband and wife team Martin and Helen Jerrold had paid themselves hundreds of thousands of pounds in dividends since being awarded the Ihat contract.

Mr Jerrold said: A key feature of the Red Snapper service is our ability to scale teams up and down in an expedient, professional manner ensuring both our clients and workers are fully supported. This is all part of the service we supply and we are ready to move to a scaling down, redeployment phase at the request of the Ihat.

Hilary Meredith, a defence solicitor who represents a number of war veterans who were investigated by Ihat, is calling for an inquiry into what went wrong with Ihat.

She said: Had the MoD supported our troops many of the false accusations brought by Ihat would have come to light much sooner, saving money and anguish. The MoD must take responsibility for creating an environment in which claims were allowed against service personnel with little or no supporting evidence. There needs to be a full inquiry into the relationship between the MoD, Phil Shiner and his firm Public Interest Lawyers.

Rachel Webster, a former Army captain, who was investigated by Ihat and was subsequently paid damages for her rough treatment during her arrest, said: There needs to be some form of inquiry into why these investigations were allowed to go on for so long.

Miss Webster, who was officially cleared by Ihat in September two-and-a-half years after being arrested in a dawn raid, added: Who thought it was right to do what they did to me and every other soldier?

Writing in todays Sunday Telegraph, Johnny Mercer, the former Army captain who chaired the parliamentary investigation into Ihat, said he was dismayed that the MoD had congratulated itself on the decision to shut Ihat when it should have been questioning why it had allowed Ihat to flourish.

It'ssad... that after all these years, the MoD decided that the best way to handle this situation was to shower praise on itself for reporting Phil Shiner, disregarding their role facilitating him, and the ensuing pain and bitterness this process had created amongst the serving ranks, he writes.

On Saturday, Mark Lancaster, the Minister in charge of defence veterans, defended its handling of Ihat.

Mr Lancaster told BBC Radio 4s Today programme: It was set up for entirely the right reasons. Without having Ihat, potentially our troops could have been subjected to inquiries by the International Criminal Court.

But it was a process that was completely abused by lawyers.

Asked about the MPs report that the MoD had been complicit in the creation of the legal industry that sprang up around Ihat, Mr Lancaster said: It is a serious allegation. Im not sure that there is any evidence that the MoD have been complicit in that."

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Unanswered questions behind the failed witch hunt of Iraq veterans - Telegraph.co.uk