Veterans who served in Malaya during a guerilla conflict 50 years ago say New Zealand soldiers who were exposed to a toxic insecticide while serving there should be compensated for their children's health problems.

A new study, printed in the New Zealand Medical Journal, found children of the veterans had a higher incidence of genital deformities and breast cancer.

New Zealand Malayan Veterans Association secretary Hiro Hamilton said soldiers were ordered to smear the pungent smelling dibutylphthalate (DBP) on the seams of their clothes to stop ticks, leeches and other insects from attacking them.

The study said it had long been known that the chemical could lead to feminisation in male laboratory animals, but it wasn't known what effect it had on humans because exposure to it had been rare.

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However the study, by Matthew Carran and Professor Ian Shaw of Canterbury University, found exposure to the substance could interfere with the metabolic production or destruction of hormones in people.

It found that the risk of genital deformities in soldiers' sons was up to eight times higher than the rest of the population, and their daughters were more than eight times more likely to develop breast cancer.

Mr Hamilton told APNZ the study was "a long time coming".

"It's 57 years overdue."

Soldiers were allowed to take their wives with them to Malaya and many started families over there.

He said the association would be lobbying for compensation from the Government for soldiers who had children affected by the insecticide.