The head of the independent body responsible for military pay has been told by No 10 that he cannot serve a second term amid claims he had been sacked for calling for troops to be compensated for government defence cuts.
Downing Street confirmed Professor Alasdair Smith would not be reappointed as chairman of the Armed Forces Pay Review Body (AFPRB), but insisted it was not linked to advice that service personnel should be given a rise to reflect the pressure of redundancies and cuts.
The Government on Thursday rejected a recommendation by the AFPRB that there should be a 0.5% increase in the so-called "X-factor" supplement - added to military pay to reflect the hardships and uncertainties of service life - on top of a 1% rise in basic pay.
The Daily Telegraph said the decision to sack him was made after he defied an order by ministers to limit pay rises for troops.
He was said to have be told he would not get a second term, weeks after he submitting his report which concluded the cuts had lead to a "deterioration in the conditions of military life" - justifying a rise in the X-factor.
A No 10 spokesman said: "Prof Smith was not dismissed as chairman of the Armed Forces Pay Review Body. After a standard three years in the post, a decision was made not to reappoint him for a further term. The decision reflects a government-wide policy of non-automatic reappointment. The decision was made after the AFPRB submitted its report."
Shadow defence secretary Jim Murphy said that Prof Smith's removal was "punitive and incompetent".
"The review body exists to make independent recommendations on forces' pay and it seems that the problem was that the advice was just too independent," he said.
"Prof Smith has been removed for doing the job he was asked to do. A government has the right to take the unusual step of not agreeing to the independent recommendations but to then refuse to renew the contract of the chairman smacks of intolerance."