A document discreetly entitled The Australian Treaty Series 1993 No.40 hides a huge untold human story of military service, international diplomacy and, some say, betrayal.

It consists of two messages – the first is from Alastair Goodlad, a junior Foreign Office minister in John Major's administration, to the Australian High Commissioner in London.

In the message, dated December 10, 1993, Mr Goodlad – now Lord Goodlad – sets out the terms of a contract which would see the British Government pay £20 million to Australia.

The payment represented a "full and final settlement of all claims" for compensation made by the Australian Government or any Australian citizen, such as a military veteran, against the British Government in relation to the UK's nuclear weapons tests.

During the 1950s the British Government carried out a series of weapons tests in and around Australia, with many Australian soldiers joining British servicemen who took part – some 20,000 military personnel in total.

The Australian Government was left with a big clean-up operation and with servicemen demanding compensation – claiming that their health had been damaged by radiation they were exposed to during the tests.

The British agreed, Lord Goodlad's message shows, to pay the £20 million in six instalments of from £2 million to £5 million, between January, 1994 and October, 1998.

The second message in the document is a short reply to Lord Goodlad from the Australian High Commissioner at the time, Richard Smith.

In it Mr Smith tells the minister: "I have the honour to inform your Excellency that the foregoing proposals are acceptable to the Government of Australia, who therefore agree that your note and this reply shall constitute an agreement between the two Governments."

Lord Goodlad went on to serve as the British High Commissioner to Australia for five years from 2000, before being made a life peer.

In 2007, he was also made chairman of the Britain-Australia Society – set up to promote good relations between the two Commonwealth states.

The Derby Telegraph attempted to contact Lord Goodlad yesterday and left him a message but received no reply.

But the agreement that was signed between the British and the Australian Governments has caused outrage among British veterans of the UK's nuclear tests.

The 1993 document highlights how politicians in Westminster were prepared to pay millions to settle potential compensation claims from Australian servicemen, but have refused to pay anything to British soldiers.

Instead, they have engaged in a legal battle to avoid paying British servicemen anything. The case they are fighting now threatens to go on for years and cost the taxpayer millions.

Harry Melia, 72, of Holmesfield, near Chesterfield, suffered prostate and stomach cancer, as well as skin conditions, after taking part in the tests.

He said: "I find it shocking and it feels like a betrayal.

"There had been talk that money had been handed over but I never knew that this was in settlement of claims by individuals.

"If they are prepared to agree to that, then why have they never agreed to settle with people in Britain?"

Meanwhile, a spokesman for the charity British Nuclear Test Veterans Association, which has members in Derbyshire, said: "These are the terrible double standards that British veterans have to put up with."

In an initial statement yesterday, a spokesman for the Ministry of Defence (MoD) argued that the payment had mainly been used by the Australian Government to decontaminate test sites.

Put under further pressure, the spokesman accepted that the 1993 deal was made by the British Government in order to settle the claims of Australian individuals, such as veterans, as well.

A second statement read: "The terms of the 1993 agreement do not rule out claims from individuals but the decision to use money paid by Her Majesty's Government would be a matter for the Australian authorities."

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