The Ministry of Defence wants to cut payouts to Light Dragoon Anthony Duncan, who was shot while on patrol in Iraq and awarded 46,000 pounds (53,000 euros, 76,000 dollars), and Royal Marine Matthew McWilliams, who fractured his thigh during exercises and received 28,750 pounds.

The two-day hearing at the Court of Appeal in London started the day the bodies of four British soldiers killed fighting the Taliban in Afghanistan were flown home.

July has been the bloodiest month yet for British troops in Afghanistan -- 22 have died so far, while the death toll since operations began in 2001 is 191.

The government is facing growing questions about the mission's purpose, although Prime Minister Gordon Brown insists it is making good progress.

Simon Weston, an ex-soldier who received severe facial burns in the Falklands War and is now a prominent campaigner, labelled the court case "car-crash politics".

"A lot of these guys will never work again or will always have problems," he said.

"This large sum of money is not so they can have jollies and go on holidays and buy flash cars -- this means they will be buying a home, they will be subsidising their own care.

"It seems so petty to be revisiting the small amount of money."

Jerome Church of the British Limbless Ex-Servicemen's Association told the BBC the appeal was "appalling timing", while Colonel Richard Kemp, former commander of British forces in Afghanistan, called the case "a disgrace".

Last week, former Conservative prime minister John Major questioned whether troops were being properly compensated for the injuries they received on the battlefield.

Duncan was initially awarded 9,250 pounds compensation which was increased on appeal, while McWilliams originally received 8,250 pounds.

The Ministry of Defence argues that the pair should only be compensated for their initial injuries and not subsequent health problems.

But in an earlier hearing, judges at the High Court described this distinction as "absurd" and ruled in favour of the troops. The government now is appealing that decision.

Defence Minister Kevan Jones told the BBC: "What we are doing today is to really make sure that the scheme which has been put in place makes sure that the most severely injured are compensated the most, and we have a scheme that is just and fair."

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