The Foreign Office paid compensation to families of British airmen shot dead after the “great escape” in World War Two, National Archives files show.
The papers also reveal some of the £1m of West German funds – intended for concentration camp survivors – was paid to families of other dead servicemen.
But survivors of the Nazi PoW camp escape were not initially compensated.
Seventy-three of the 76 men who fled the Stalag Luft III camp in 1944 were recaptured. Fifty were later shot.
Their exploits were subsequently dramatised in the 1963 film the Great Escape, starring Steve McQueen.
Although the Federal Republic – then West Germany – had agreed to compensate victims of the concentration camps, the initial scheme only applied to people who had been living permanently in Germany, or had emigrated from there.
So Britain, along with 10 other countries, pushed for agreements to ensure their own nationals would be compensated too.
The terms of the 1964 agreement between Britain and Germany were clear.
Persecution by the Nazis meant detention for reason of nationality, race, religion, or political view “in Germany or in any territory occupied by Germany in a concentration camp or in an institution where the conditions were comparable with those in a concentration camp”.
It specifically excluded service personnel held in other camps – even if they’d been tortured or murdered.
“Hardships suffered in a normal civil prison civilian internment camp or prisoner of war camp do not constitute Nazi persecution nor does treatment contrary to the Geneva Convention and the rules of war, even though resulting in permanent injury or death,” it said.
The files show the Foreign Office initially held to this line, fearing it could open the door to many more claims, from prisoners of war and others – and that was not what the Germans had agreed.
However, according to research by Professor Susanna Schrafstetter of the University of Vermont, the Ministry of Defence lobbied hard for the families of the 50 murdered “great escapers” to be included.
And so eventually payouts were offered by the Foreign Office to the families. These included sums of £2,293 to relatives of Flight Lieutenants Edgar Spottiswoode Humphreys, Gilbert William Walenn, John Francis Williams, and Cyril Douglas Swain.
But this family aid was not publicised, and survivors of the Stalag Luft III escape were told they were not eligible for compensation, even though several had spent time in the Sachsenhausen concentration camp.
It led to a huge outcry at the time, a parliamentary inquiry, and an eventual settlement.
Foreign Office officials quietly added other cases it deemed exceptional including payments to relatives of Special Air Service (SAS) and Special Operations Executive personnel killed by the Nazis.
Captain Anthony “Andy” Whately-Smith of the SAS parachuted into occupied France in September 1944.
The 29-year-old was part of Operation Loyton, tasked with harrying the retreating Germans. At the end of October, Captain Whately-Smith was captured by German soldiers, along with fellow SAS officer Major Denis Reynolds.
They were taken to a camp in Alsace, brutally interrogated, then moved to Gaggenau in Germany where, on 25 November, with 12 other prisoners, they were shot.
According to the newly-released records, the Foreign Office wrote to his family in 1966 – 22 years later – inviting them to apply for compensation for his death as a victim of Nazi persecution.
Captain Whately-Smith had no children and had separated from his wife. His father had founded a successful prep school, Hordle House in the New Forest and the family were not in need.
The records show they eventually received just over £1,000 in compensation for their relative’s death.
Captain Whately-Smith’s nephew Christopher said: “The family, especially my grandfather, was greatly moved by his loss.
“The compensation meant a degree of closure – which is why they accepted it when offered.”
His uncle gave the money to his own children, in premium bonds, while his father bought a small boat.
Irish seamen refused to work for Germans
About 4,000 people applied to the Foreign Office between 1964 and 1965 for help from the £1m fund, paid for by West Germany, with a quarter of claims successful.
The latest release of National Archives files on the fund also show compensation was paid to a group of Irish-born merchant seamen, who were sent to concentration camps because they refused to work for the Germans.
They were held at the Marlag-Milag Nord camp in Germany and asked to work on railways at Bremen and at the shipyards in Hamburg.
But, being from a politically neutral country at the time, they refused to support the Nazis and were sent to the Bremen-Farge camp until their release at the end of the war.
Unusually, the compensation applications were initiated by the British government itself.
The men were initially awarded £1,000 in compensation, but were subsequently given a further £1,385.
But the papers show a British serviceman who spent two years in solitary confinement at a prisoner-of-war camp was denied compensation because of a technicality about where he had been detained.
Jack Thorez Finken-McKay, who transferred from the Royal Fusiliers to the War Office to perform special duties, said he became “a living skeleton” at the hands of the Gestapo in his letter to the Foreign Office.