British Gurkhas are taking their battle for equal pension rights to the European court of human rights. After winning a battle championed by actor and campaigner Joanna Lumley for equal rights of UK residence, the veteran Nepalese members of the British army are challenging the Ministry of Defence over their pension arrangements.

The British Gurkhas Welfare Society (BGWS) said it was turning to the Strasbourg court after being rebuffed in a test case in the UK. The legal battle is over the fact that Gurkhas who retired before 1997, despite having won the right to settle in the UK after Lumley's campaign, continue to receive far smaller pensions than their British and Commonwealth counterparts.

A case launched by the BGWS ended with the court of appeal backing the MoD, and the supreme court last December refused the Gurkhas permission to appeal further. The next step is a legal challenge in Strasbourg for allegedly breaching the Gurkhas' human rights.

The BGWS chairman, Tikendra Dal Dewan, a retired army major, said on Monday: "We have taken this step reluctantly but with the knowledge that not pursuing legal options further would effectively put a nail in the coffins of many veterans. It is desperately sad that, after many years of committed and courageous service, these old soldiers cannot find justice within the UK's borders - and it should be to the government's shame that the continuing poverty they face goes uncorrected."

The organisation says many elderly veterans, in the UK and Nepal and particularly those who retired before 1997, face "desperate poverty".

In May 2009 the Labour government announced that Gurkha veterans who had served four years or more in the British army before 1997 would be allowed to settle in Britain. However, the former soldiers will have to wait years for a hearing and verdict in their pensions case as the Strasbourg judges are not expected to consider their claim until late 2012 at the earliest, with a final verdict due in 2013 or 2014.