The decision has sparked disappointment among some Sikh community leaders, who said there would be enough interest to make up a regiment, the paper added.

The army has repeatedly been in the headlines over alleged racism in recent months -- in March, British soldiers from Commonwealth countries formed a new body to fight discrimination in the armed forces.

The following day, a lawmaker with the main opposition Conservative Party, former army colonel Patrick Mercer, was forced to quit his shadow ministerial job after suggesting that being called "a black bastard" was a fact of life for ethnic minority British soldiers.

"The creation of a Sikh regiment has been considered by the army policy staff responsible for both equality and diversity issues, who went on to consult with the Commission for Racial Equality," a Ministry of Defence spokesman told the paper.