The Defence Secretary said that the MoD – rather than being criticised – should receive credit for forcing Mr Shiner and his firm Public Interest Lawyers out of business.

Sir Michael said: “It was the MoD that supplied the main evidence that got Phil Shiner struck off for making false allegations against our Armed Forces. Exposing his dishonesty means many more claims he made can now be thrown out and the beginning of the end for Ihat.”

Sir Michael also announced that Operation Northmoor, a separate investigation into alleged abuses in Afghanistan, was being scaled back dramatically. The MoD said the Royal Military Police was “set to discontinue around 90 per cent of the 675 allegations” of alleged mistreatment of Afghans.

The scope of Operation Northmoor was first reported by The Telegraph last autumn, including a criminal inquiry into troops who arrested a Taliban commander accused of masterminding a bombing campaign.

Its caseload will now be reduced to just 60 or so cases. But military leaders and veterans attacked the Government for failing to shut down Ihat more quickly.

Johnny Mercer, a Tory MP and former Army captain who chaired the parliamentary inquiry, said: “Throughout this process there has been an almost total disregard of the welfare of soldiers and their families.

“The MoD must take responsibility for allowing this to happen. They could have discriminated between credible and non-credible cases yet they lacked the will to do so.”