The partners of gay service personnel are set to be recognized as fully-fledged spouses for the first time, following a key concession by the Ministry of Defence. After meetings with the Armed Forces Lesbian and Gay Association the MoD appears to have admitted that the gay partners of service personnel could be considered spouses. The move would mean that gay partners could also receive pensions and other benefits.

The prospect of homosexual couples living openly on army bases in the UK and overseas concerns those who have been opposing reform. One senior officer branded it "political correctness gone mad". But the discussions in London have been welcomed by homosexuals in the forces. Lt Commander Craig Jones, one of the most senior officers to come out, said he would be keen to live with his male partner in Royal Navy married accommodation.

"There are a lot of people in our position, but few who are open about their sexuality," Jones said. "The services like to move at their own pace and have a tendency to be oversensitive. This shows they are slowly getting the message." Jones said his partner had accompanied him to formal mess dinners while serving on HMS Fearless. "We had a fantastic reaction," he said.

Homosexuality was forbidden in the armed forces until January last year. The ban, which led to up to 200 sackings a year, was lifted after the European Court of Human Rights ruled it unlawful. The ban on gay service personnel was justified on the grounds of military effectiveness. 10 months after the ban was lifted, a Ministry of Defence review of the consequences found that the operational ability of the forces was unaffected. "The services reported that the revised policy on homosexuality had no discernible impact, either positive or negative, on recruitment," the report said, remarking on the "mature, pragmatic approach which allowed the policy to succeed".

The MoD has stated that it is trying to move ahead of European legislation rather than merely react to it. A European directive that will come into force in 2003 will make it illegal for employers to discriminate on the grounds of sexual orientation. An MoD spokesman said: "The services are looking at the whole question of unmarried people living together, and homosexuality obviously has to be considered. At the moment everything is predicated on marriage."

Though there is no provision for same-sex marriages in English law, the MoD policy favouring traditional families could leave it open to scores of legal challenges from unmarried couples - gay or otherwise - following the incorporation of the European Convention on Human Rights into UK law.

Many senior officers fought the lifting of the ban. One called moves to allow same-sex marriages "madness". "It's a monstrosity. We are becoming an army of social workers not soldiers. There is all this focus on issues of gays and women and very little recognition of the fact that we have tens of thousands of soldiers doing a very professional job with increasingly limited funds," he said.