David Cameron's clampdown on "spurious" legal claims against veterans of the Iraq War has been welcomed by Falklands War hero Simon Weston.
The Prime Minister has asked the National Security Council to draw up a plan to "stamp out" what he described as an "industry" trying to profit from servicemen.
Proposals for action include measures to curb the use of "no win, no fee" arrangements and accelerate the introduction of a 12-month residence test for eligibility for legal aid.
Law firms which are found to have abused the system could also face tougher penalties under the measures being considered.
Mr Cameron said action would be taken against any legal firm found to have abused the system in the past to pursue "fabricated" claims.
"It is clear that there is now an industry trying to profit from spurious claims lodged against our brave servicemen and women who fought in Iraq," he said.
"This is unacceptable and no way to treat the people who risk their lives to keep our country safe - it has got to end."
The PM added: "Our armed forces are rightly held to the highest standards, but our troops must know that, when they get home from action overseas, this Government will protect them from being hounded by lawyers over claims that are totally without foundation."
Mr Weston, 54, who became nationally known for his recovery and charity work after being badly burned in the Falklands conflict, said he had "huge concern" over how many legal claims against servicemen could be legitimate.
He told the Press Association: "You have snipers being called into question who have judgment calls to make ... It is so wrong that other people back here in their little ivory white towers in their comfy, cosy armchairs by the fireside, once they have gone after the ambulance-chaser van, then decide to judge that person.
"Nobody ever should be above the law. But don't sit back here in your idle judgment just because it's a job for you."
Mr Weston added: "Unless you have got absolute cast iron evidence, don't put people through the traumas of having to go through a legal case which can never be proven, or in the end is proven wrong. A lot of these guys, they can't afford to defend themselves. Where are they supposed to get the money from? They are being made bankrupt by some of these cases."
He added: "It's a terrible thing to put men and women and their families, who have been through enough of armed conflict, it's a terrible thing to put them through again."
Mayor of London Boris Johnson also criticised lawyers who he said unfairly went after military personnel.
He told PA: "They have ambulance-chasing lawyers, who frankly don't make their lives any easier with some of the cases they try to bring, and make it very hard for them to do their jobs."
Law firm Leigh Day has already been referred to the Solicitors Disciplinary Tribunal as a result of the failure to disclose a key document to the £31 million Al-Sweady Inquiry.
The inquiry concluded in its final report in December 2014 that allegations of war crimes following the Battle of Danny Boy on May 14 2004 in southern Iraq were based on "deliberate lies, reckless speculation and ingrained hostility".
Once disciplinary proceedings have been completed against any firm, Defence Secretary Michael Fallon has been ordered to prepare the ground for seeking to recover as much of the taxpayers' money spent on the inquiry as possible.
The Legal Aid Agency has also been asked to review all contracts to establish whether legal aid should be restricted on an interim basis in relation to any firm under investigation for misconduct, and whether such contracts should be scrapped entirely after disciplinary proceedings have been completed.
A Downing Street source said: "It would be unprecedented for the Government to sue a law firm in this way - but if they are found to have acted improperly, then it will be the right thing to do. The public, and the soldiers who have been subject to malicious lies, would expect nothing less."
Mr Cameron's action comes just days after Mr Fallon told MPs he was concerned about the "industrial scale" of claims against serving personnel and veterans.
The Iraq Historic Allegations Team (Ihat) has sent documents to around 280 veterans telling them they were involved in an incident under investigation.
A spokesman for Leigh Day said the Government had paid compensation in more than 300 cases relating to the abuse and unlawful detention of Iraqis, including the death of Baha Mousa in 2003.
The spokesman said: "No-one is above the law, not us, not the British Army and not the Government. We cannot imagine that the Prime Minister is proposing that this should change.
"We have made it very clear that we refute all of the allegations that have been laid before us by the Solicitors Regulatory Authority. We will contest those allegations vigorously before the Solicitors Disciplinary Tribunal."