Hundreds of retired Gurkhas have demonstrated in Westminster to demand the right to remain in the UK and pension equality with British soldiers.
Gurkha veteran Indra Gurung handed in his medals in protest
Fifty of the Nepalese soldiers have handed back their Long Service and Good Conduct medals in protest.
Gurkhas who retired after 1997 can automatically stay in the UK, but those who retired earlier must apply.
Communities Secretary Hazel Blears said ministers would listen "carefully" to what the protesters had been saying.
"I think we have to listen very carefully to what the Gurkhas are saying out there today demonstrating in a very peaceful, very honourable way...but I do think it is difficult to do things retrospectively," she said.
"The people who have been here since 1997 do have a right to join our pension schemes, to get treated in a similar way."
At prime minister's question time in the House of Commons earlier, Lib Dem leader Nick Clegg held up one of the Gurkhas' medals and demanded they be given equal pay and pension rights as well as the right to live in the UK.
He told MPs ministers had made a "spectacular misjudgement" on the issue.
Addressing Mr Brown, he asked: "Can you explain to the Gurkhas why on earth you believe that Gurkhas who served in the Army after 1997 are worthy of British citizenship but those who served before that date should be deported?"
Mr Brown responded by saying the Gurkhas did a "tremendous job" for Britain and that the UK government was the first to extend equal pay and pension rights to those serving since 1997.
"Now why is the date 1997? It's the date that the Gurkhas - once based in Hong Kong - moved to be based in Britain," he added.
"And that's why we are honouring the promises we made for the period after 1997."
A bill has been launched in the House of Lords to try to change the law regarding the right for all Gurkhas to remain in the UK. Protesters are also calling for pension rules to be reformed in a similar way.
Mr Clegg, who attended the protest, said the retired soldiers had his full support.
"They fought on the front line very bravely in a long list of conflicts - they then retired from the Army and they are told they are not allowed to stay in this country.
"I think this is a simply scandalous way to treat some of the most modest, brave and courageous individuals I have ever met."
Soldiers who retire after July 1997 - when Hong Kong, the former base of the Gurkhas, was handed over to China - receive a pension on the same terms as the rest of the British Army.
But those who retired before that date collect one-sixth of the amount received by a British soldier.
Peter Carroll, one of the march organisers, said it was "morally outrageous" for people to serve Britain and then be told "they are not allowed to stay".
Chhatra Rai, general secretary of the British Gurkha Welfare Society, said: "Every time the MoD [Ministry of Defence] makes an announcement over changes it says that Gurkhas are now being treated equally. But that is not the case when you look into it."
Gurkhas have fought for Britain since 1815 and served in conflicts including the Falklands and Afghanistan. They are now based at Shorncliffe near Folkestone, Kent.
Prince Harry was based with a Gurkha regiment during his time in Afghanistan last month.
The Home Office said the rule concerning the 1997 date was introduced because that was when the Gurkhas became a UK-based force, and its soldiers were likely to develop strong ties to Britain.
Regarding pensions, Defence Minister Derek Twigg said he recognised the professional service given by current and former Gurkhas.
"I believe that the terms and conditions of service for serving Gurkhas, and pensions paid to ex-Gurkhas are fair and recognise the changes to the Brigade of Gurkhas since 1997," he said.