The German government is paying 34 “Nazi collaborators” living in the UK £12,000 in tax free pension payments each month, The Telegraph can reveal.

The lump sum handouts are part of a series of payments made to 2,000 former soldiers or collaborators wounded fighting for the Third Reich.

It is understood that just over a fifth of the pensioners are German, with the vast majority thought to be foreigners who collaborated with the Nazi regime.

In total, just under £12,000 a month - or £144,000 a year - is paid to the 34 people living in the UK who are entitled to the money after suffering injuries in the war. If that sum was divided equally it would mean each of the 34 pensioners would receive £350 a month, just over £4,000 a year.

Critics of the scheme say it is unfair because those taken into forced labour camps only receive £43 a month.

However, the German Embassy in London, which disclosed the total amount paid to those living in the UK after contacting its labour ministry, stressed that some pensions were awarded also to civilians injured during World War Two.

An embassy spokeswoman added that checks are carried out by the Germany authorities to ensure those in receipt of the payments had not been involved in any war crimes.