They often wore only army-regulation shorts and T-shirts to protect them from atomic explosions, and were stationed dangerously close to mushroom clouds or hosed-down contaminated equipment wearing just swimming trunks. The soldiers and civilians who worked on France's notorious nuclear tests in the Sahara desert and south Pacific have long fought for compensation for the cancer and long-term health effects they blame on the state's failure to protect them.

But for years France resisted, fighting veterans in the courts and building a wall of silence around the dangers of the controlled explosions.

Yesterday the French defence minister finally broke the taboo, saying a law would be introduced in January to compensate those suffering illnesses among the 150,000 army and civilians who worked on the tests in Algeria and French-owned Polynesian atolls.

Hervé Morin said France would draw up a list of health problems that could be linked to radiation exposure over the course of 210 tests from 1960 to 1996. He admitted that France lagged behind countries such as the US in failing to acknowledge long-term health effects, saying: "Today, we must recognise these victims."

"We were guinea pigs who have had no proper medical support," said Michel Verger, president of the veterans' pressure group, Aven. The group, which has about 3,000 members, surveyed more than 1,000 veterans and found 35% had one or two cancers and one in five were infertile. Verger said veterans suffered a range of illnesses, including cancers of the blood and cardiovascular problems, and their children and grandchildren were also suffering health complications.

Drafted for the war in Algeria when he was 20, Verger took part in the first French nuclear test in the Sahara desert in 1960 - the controlled explosion of an atomic bomb more powerful than that dropped on Hiroshima. "I was wearing shorts. We were made to lie face down on the ground, eyes closed and arms folded and not watch the flash, but immediately afterwards we had to get up with an apparatus round our necks and measure and photograph the impact. I had no sunglasses. There was one pair between 40."

He added: "For a long time there was a wall of silence from the state because France was a nuclear power in military and energy terms. Leaders on the right and left perhaps thought that if they recognised that people present at the tests were ill it could prejudice the country's civil nuclear energy."

He warned that France should not limit the range of illnesses eligible for compensation.

Other veterans have described how they were ordered to manoeuvre tanks close to explosions or to drive to "point zero" after a bomb went off.

During the tests at Mururoa in French Polynesia in the late 1960s, one veteran described how he was stationed in shorts and T-shirts on a boat only about 15 miles from the explosion before sailing immediately to the area of the vast mushroom cloud to examine the damage.

Jacques Chirac caused controversy when he resumed tests around atolls in French Polynesia in the south Pacific shortly after being elected president in 1995. In 2006 a French medical research body found nuclear testing had caused an increase in cancer on the nearest inhabited islands.

In recent years several court cases have been brought by nuclear test veterans suffering health problems who complained the state had denied them disability pensions.

The government said yesterday it would no longer appeal when courts ruled against the state in these cases.

But the defence ministry warned that the compensation law would be strict and could rule out illnesses whose causes were linked to other risks such as smoking and alcohol.