The PM plans to introduce an automatic ‘opt-out’ from certain aspects of human rights law, under changes being announced at the Conservative conference in Birmingham.
The Government will adopt a presumption that it will “derogate” from the European Convention on Human Rights at times of war, after the Ministry of Defence spent more than £100 million on Iraq-related investigations, inquiries and compensation since 2004.
And she said it would reduce the burden on taxpayers.
Mrs May last month raised concerns over the “industrial scale” of claims lodged with the Iraq Historic Allegations Team (IHAT), which was set up in November 2010 to look into allegations of murder, abuse and torture of Iraqi civilians by UK military personnel between 2003 and 2009.
IHAT has considered claims relating to more than 1,500 individuals, ranging from ill treatment during detention to assault and death by shooting.
Some 326 cases have been settled with the payment of around £20 million in compensation, but concerns have been raised about servicemen facing investigation even after having been cleared of wrongdoing by criminal courts.
Military advisers have warned that the extension of the Convention’s provisions to the battlefield threatens to undermine the operational effectiveness of the armed forces, said Government sources.
But the procedure - known as “derogation” - may not be used in respect of the right to life and prohibitions on torture, slavery and retrospective criminal penalties.
France took advantage of the procedure in November 2015 during its response to the terror attacks in Paris, while the UK took the same step several times during the Northern Irish Troubles in the 1970s, and was backed by the European Court of Human Rights.
Mrs May said: “Our armed forces are the best in the world and the men and women who serve make huge sacrifices to keep us safe.
“My Government will ensure that our troops are recognised for the incredible job they do. Those who serve on the frontline will have our support when they come home.
“We will repay them with gratitude and put an end to the industry of vexatious claims that has pursued those who served in previous conflicts.
“Combined with the biggest defence budget in Europe, the action we are laying out today means we will continue to play our part on the world stage, protecting UK interests across the globe.”
The announcement follows the closure in August of law firm Public Interest Lawyers, which had represented many complainants against the armed forces. And it comes after the Government said it would create new penalties for firms engaging in “vexatious” practices to drum up cases.
The Conservative manifesto for last year’s general election committed the party to ensuring that “British armed forces overseas are not subject to persistent human rights claims that undermine their ability to do their job”.
Defence Secretary Sir Michael Fallon said: “Our legal system has been abused to level false charges against our troops on an industrial scale.
“It has caused significant distress to people who risked their lives to protect us, it has cost the taxpayer millions and there is a real risk it will stop our armed forces doing their job.
“This change is an important step towards putting that right – a key commitment the Conservative Party made in last year’s general election.
“It will help to protect our troops from vexatious claims and ensure they can confidently take difficult decisions on the battlefield. And it will enable us to spend our growing defence budget on equipment, not fees for lawyers.”