A black female soldier who fronted British Army recruitment campaigns has received an apology and substantial payout from the Ministry of Defence after being subjected to years of “racist and sexist abuse”.

Kerry-Ann Knight, who featured on posters for a £1.5 million military recruitment campaign, was left feeling that the Army was “institutionally racist”.

The former corporal told an employment tribunal that colleagues directed slurs about slavery towards her, including references to “lynching” or “tarring and feathering” her.

She claimed her colleagues praised Hitler and repeatedly targeted offensive racial language and stereotypes around her, such as shouting “watermelon” when she walked into a room.

Ms Knight also faced sexist abuse and harassment while serving, such as being shown pictures of a colleague’s penis at a work event, and being asked to comment on it.

In an apology to the former soldier, the army’s director personnel Major General Sam Humphris admitted she had experienced “racist and sexist harassment”.

Ms Knight worked as an instructor at the Army Foundation College in Harrogate, North Yorkshire, before the abuse forced her to resign.

Her discrimination claim was taken to an employment tribunal in Leeds, but the parties settled before a final judgment was made.

Ms Knight said she had been left feeling “absolutely devastated” by her treatment.

“I was so determined to make it work and help make the British Army a better place for women and black people, and so for everyone. But my experience eventually showed me that no matter what I did, I would never be accepted,” she said.

“The way the army conducted itself throughout its internal complaints process and throughout this litigation is nothing short of shameful,” Ms Knight’s solicitor Emma Norton said.

“For the army, it was not the racists that needed to be dealt with it, it was Kerry-Ann, because she’d had the audacity to complain about racism and misogyny.

“It is all dreadfully familiar and shows that, in the British Army, it’s worse to accuse someone of racism than it is to be racist.”

Baroness Kishwer Falkner, chairwoman of the Equality and Human Rights Commission – which provided funding and assistance for Ms Knight said: “As one of the UK’s largest employers, and a public authority under the Equality Act, the British Army should be a standard-bearer when it comes to protecting their employees from discrimination.

“Many of the most recent recruits in the army today will have joined after seeing Ms Knight’s face in a recruitment campaign. Like everyone else in the country, they have the legal right to be treated fairly regardless of who they are or what they look like.

Major General Humphris, on behalf of the British Army, said in an apology sent to Ms Knight: “As director personnel and a member of the Army Board, I sincerely apologise on behalf of the Ministry of Defence.

“The army accepts that you had to work in an unacceptable organisational environment where you experienced racist and sexist harassment. There was a failure within the army in not responding properly to that environment or your complaints about it.

“The army wishes to apologise for the treatment you received. Your loss is a matter of regret.”

The Ministry of Defence’s apology and financial settlement does not contain an admission of liability by the British Army.