The Ministry of Defense forked over the cash to Jan Hamilton, previously known as Capt. Ian Hamilton, in a settlement before the case went to court, The Sunday Times of London reported.

Hamilton said she was seriously embarrassed when asked to show up for an April 2007 medical exam in a man's uniform.

"I have been living as a woman since January, but as far as the army is concerned I am still a man. It would have been humiliating and demeaning for me to turn up for my medical examination dressed in a man's uniform," Hamilton said.