The men, all warrant officers -- the highest non-commissioned rank -- were told their contracts would be terminated in 12 months' time due to army cutbacks, as the government tries to clear a huge budget deficit.

The group, who all have more than 20 years' service, were told to "start planning your resettlement", in an impersonal email, instead of being told face to face.

The incident, blamed on an administrative error, has left Defence Secretary Liam Fox "furious".

"The prime minister is very, very clear that the way this has been handled is completely unacceptable," Cameron's spokesman told reporters.

"This was an unacceptable way of dealing with our armed forces and the prime minister has been very clear that he values their contribution extremely highly."

Britain has around 9,500 soldiers serving in Afghanistan and Cameron's Conservative Party campaigned vigorously while in opposition for the armed forces to be better treated by the government.

The soldiers who received the email are on what the army calls a Versatile Engagement Long Career (VEng LC).

This means that, after completing 22 years' duty, they have been placed on a rolling contract called the Long Service List (LSL) to continue their careers.

The Sun newspaper reported the email from Major Andy Simpson as saying: "In my capacity as the career manager for the VEng LC and LSL, I write to notify you that, with regret, I must issue you with 12 months' notice of termination.

"As I'm sure you are aware, the army has to make significant cutbacks and we as the VEng LC and LSL are expected to play our part in reductions."

The army has apologised for any distress caused and said commanding officers have since given advice and support to the 38 soldiers.

Following a strategic defence and security review, Cameron's government is to reduce defence spending by eight percent over four years, with 42,000 jobs to be cut across the services.

The email incident comes after reports Monday that 100 student pilots, a quarter of the Royal Air Force's trainee pilots, will be sacked, despite the high cost of their training so far.

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