Revd Nicholas Mercer has suggested David Cameron was branding some lawyers as "money-grabbing" and this was "simply wrong".
It's after the National Security Council was asked to stop what the Prime Minister has called "spurious" claims and it's thought this could involve new measures, such as tougher penalties for law firms caught abusing the system.
Mr Cameron said: "It is clear that there is now an industry trying to profit from spurious claims lodged against our brave servicemen and women who fought in Iraq.
"This is unacceptable and no way to treat the people who risk their lives to keep our country safe - it has got to end.
"Our armed forces are rightly held to the highest standards, but our troops must know that, when they get home from action overseas, this Government will protect them from being hounded by lawyers over claims that are totally without foundation."
The Iraq Historic Allegations Team has sent documents to around 280 veterans telling them they were involved in an incident under investigation.
Speaking on the BBC Radio 4 Today programme, Revd Nicholas Mercer said concerns were raised by himself and others about prisoner abuse from early in the invasion.
He said: "Simply to polarise it as money-grabbing lawyers is simply wrong.
"There are plenty of us who have raised our concerns without any financial motive at all, if indeed the other lawyers have got a financial motive.
"The Government have paid out £20 million for 326 cases to date.
"Anyone who has fought the MoD knows that they don't pay out for nothing."
Lord Dannatt, former chief of the general staff and Christian, told Today the PM was right "to draw a line in the sand and protect the freedom with which the military have to operate in order to carry out its operations on behalf of the nation".
He added: "Once you start to contest cases, this is what the lawyers absolutely enjoy because the cost of the cases absolutely rise and their fees become excruciatingly high.
"That is the sort of thing the Prime Minister is trying to bear down on.
"No-one is saying the military is above the law."