The MoD is challenging a ruling by a war pensions tribunal that Shaun Rusling, a former sergeant in the parachute regiment, suffers from the syndrome as a result of his service in the 1991 conflict.

The landmark ruling in Mr Rusling's favour is the first official recognition that the syndrome exists, something the MoD has always denied.

The decision, by a tribunal in Leeds last May, was hailed by thousands of Gulf war veterans as a significant development in their fight to force the MoD to accept their claim that their illnesses were caused by a common factor. Many blame them on a cocktail of immunisations given to troops, or on depleted uranium from used missiles.

Veterans' symptoms range from insomnia and fatigue to headaches, confusion, mood swings, joint and muscle pain, nausea and swollen glands.

More than 2,000 hope to sue for compensation, but the MoD argues that, after research studies in Britain and America, there is no evidence of a common illness directly attributable to the Gulf war.

The ministry recognises "symptoms and signs of ill-defined conditions", which satisfied Mr Rusling's pension claim, and says the tribunal wrongly labelled it Gulf war syndrome.

Philip Havers QC, for the MoD, told Mr Justice Newman at the high court in London that it was accepted that Mr Rusling's disablement was attributable to his service in the Gulf. He was being paid a full pension, backdated to when he made his claim in 1993. This meant the tribunal should not have entertained his appeal against the MoD's rejection of the label Gulf war syndrome because there was no longer anything to appeal against, Mr Havers claimed.

If that argument failed, he would contend there was no evidence to justify the tribunal's decision or that it acted on inadmissible evidence and that it failed to give proper reasons for its ruling.

The judge asked why it mattered what label was attached to Mr Rusling's illness. Mr Havers replied: "It matters to the secretary of state because, if this appeal fails, it would be open in the future for a serviceman who is otherwise being paid a full pension to appeal to the tribunal simply over the label to be attached to his disablement."