Calls for an independent inquiry into the plight of veterans with Gulf war illness intensified yesterday after the collapse of their eight-year compensation battle against the Ministry of Defence.

Lord Morris of Manchester, a supporter of the veterans, said he would deliver a letter to the prime minister calling for an inquiry and ex gratia payments to veterans suffering from a range of illnesses after service in the 1991 Gulf war.

As revealed in the Guardian yesterday, the Legal Services Commission is expected to withdraw funding for the claim by more than 2,000 ex-service personnel suffering from symptoms including neurological problems, headaches, depression, muscle weakness, joint and muscle pain, sleep disturbance, skin rashes and shortness of breath.

Former troops from several allied forces who served in the Gulf have about twice the normal rate of ill health. Several possible causes, including depleted uranium from munitions, a cocktail of vaccinations and anti-nerve agents, have been suggested.

But their lawyers have told the LSC, which administers legal aid, that there is not enough scientific evidence to prove that their illnesses were due to their service. Evidence of negligence on the MoD's part is also scant.

Paul Tyler, Liberal Democrat MP for North Cornwall and a member of the Royal British Legion Group, said: "We are now absolutely determined that we need urgently to press the case for an independent inquiry."

The collapse of the legal battle means that "the government can no longer pass the buck to the courts", said Mr Tyler.

"The fact that the legal case has petered out in no way implies that the illnesses have petered out - far from it."