Brown was forced to surrender after being outflanked in a lobbying campaign led by actress Joanna Lumley, whose father served with the Gurkhas.

Interior minister Jacqui Smith told parliament former Gurkhas who retired before 1997 with more than four years' service would now be eligible to apply to live in Britain. She said that meant up to 15,000 veterans might now apply.

Brown had suffered a parlia- mentary defeat last month on the issue, his first since taking over from Tony Blair in 2007.

Lumley, 63, wiped away tears on what she called "a day for celebration" and thanked Brown who met her at his Downing Street residence to tell her the Gurkhas had won their battle.

"I want to pay a special tribute to Gordon Brown...a brave man, who has made today a brave decision on behalf of the bravest of the brave," she told reporters outside parliament.

Brown is trying to re-assert his authority as he tackles the worst recession in more than 60 years with local and European elections on June 4. His Labor Party trails the Conservatives in opinion polls ahead of a national election due by mid-2010.

Brown had appeared to misjudge the public mood over the Gurkhas, who have been fighting for Britain since 1815.

Allowing all veterans to resettle in Britain would cost 1.4 billion pounds ($2.1 billion) and strain already stretched public finances, the prime minister argued.

Last month, parliament backed an opposition motion to give all Gurkha veterans equal rights to stay in Britain. The vote was not legally binding but it fueled a growing campaign to force the government to change its mind.

Smith said the first Gurkhas to be given the right to settle in Britain were those who served on or after 1 July 1997, when their base moved to Britain from Hong Kong. Since then, more than 6,000 Gurkhas and their families have been given the right to live in Britain.