Guantanamo Inmates Set To Receive Payouts Of Up To £1Million By Nigel Morris and Tom Peck

British former inmates of Guantanamo Bay are to set to receive large payments from the Government to drop claims that British secret agents knew they were being tortured.

Ministers are expected to announce today that a settlement has been reached with at least seven men in a combined pay-off likely to run into millions of pounds. One of the former detainees could receive compensation worth around £1m, ITV News reported last night.

They claimed that agents both from MI5 and MI6 were complicit in their degrading treatment by turning a blind eye to their "rendition" to the United States detention camp and to the torture of some of them. British officers have been accused of providing questions to be used in the interrogation of some of them.

Allegations made by the former detainees include that some of them were subjected to the controversial practice of waterboarding. One claims to have lost the sight in one eye after it was rubbed with a rag soaked in pepper spray.

The men in line for payments include Binyam Mohamed, Bisher al- Rawi, Jamil el-Banna, Richard Belmar, Omar Deghayes, Moazzam Begg and Martin Mubanga.

They had been pursuing a court case which would have required the Government to surrender hundreds of thousands of confidential documents.

It is understood that negotiations had been taking place between Government lawyers and the representatives of the Guantanamo claimants, with two QCs acting as independent arbiters. David Cameron, who told the Commons in July of his frustration that the security services were "paralysed by paperwork" as they prepared for court cases, sanctioned the payments.

Exact details of how much the men receive are unlikely to be disclosed. Some are British citizens; the others resident after claiming asylum. The High Court has been notified that a settlement has been reached.

Downing Street today confirmed that a Commons statement would be made on the subject. A spokesman had said last night that Mr Cameron was clear that "we need to deal with the totally unsatisfactory situation where for the past few years the reputation of our security services is overshadowed by allegations about their involvement in the treatment of detainees held by other countries".

When claims of MI5 collusion into the torture of one of the men, Binyam Mohamed, first became public, the then Shadow Justice Secretary, Dominic Grieve, now the Attorney General, called for a judicial inquiry into the allegations and for the matter to be referred to the police.

Court papers revealed last year how Mr Mohamed's genitals were sliced with a scalpel and other torture methods employed were so extreme that, according to one court official, waterboarding was "very far down the list of things they did".

Now ministers will hope that the payments will draw a line under an embarrassing controversy that has dogged the British Government for several years.

But the move using taxpayers' money will generate huge controversy, provoking accusations that ministers had bought the men's silence.