Acting on a European court ruling, Britain eliminated all restrictions on gays in its military forces today, saying that sexual preference will be a "non-issue" in recruitment, assignment, promotion and disciplinary decisions.

Under the military's new code of conduct, "sexual orientation is regarded as a private matter for the individual," the Defense Ministry said. Neither recruits nor active service personnel will be asked to disclose their sexual preference, and "if people declare themselves to be homosexuals . . . no special arrangements will be made."

The Defense Ministry said it will welcome back former soldiers who were discharged under rules that barred gays.

"They've done it the right way," declared a delighted Simon Langley, spokesman for Rank Outsiders, a support organization for gay British military personnel. "We've got a policy of complete indifference now. We've achieved something that, regrettably, President Clinton was not able to achieve with 'don't ask, don't tell' in the U.S. military."

With Britain's turnabout, the United States and Turkey are the only NATO members that still ban acknowledged gays from military service.

NATO officials said the British decision is not expected to disrupt the way other Western allies handle sexual orientation in the military because most NATO governments long ago concluded it should remain a private matter--unless it affects military discipline.

Most NATO countries other than the United States have remained relatively mute about the question of gays in the armed forces, and have not applied a sexual orientation policy.

"For many years, a lot of European countries seem to have dealt with the gay issue on a 'don't ask, don't tell' basis," a NATO diplomat said. "I can't see how things will change because most governments still seem to think the best approach is for every individual case to be handled separately."

The change in policy here was not a surprise because the military already had indicated it would comply with a ruling last September by the European Court of Human Rights. The court, ruling in favor of four gay enlistees dismissed from the British military, held that it is a violation of European human rights treaties to discharge military personnel because of sexual orientation.

That ruling was accepted here with minimal complaint. Accordingly, Defense Secretary Geoffrey Hoon had smooth sailing today when he rose in the House of Commons to announce the change. With a smattering of exceptions, even speakers from the opposition parties accepted it.

Hoon told Parliament that military personnel experts had decided it would be impractical to try to write specific rules on various types of sexual conduct. Instead, the military will use a more general Service Test that makes no reference to sexuality. The Service Test reads: "Have the actions or behavior of an individual adversely impacted, or are they likely to impact, on the efficiency or operational effectiveness of the service?"

There are about 220,000 people in the British armed forces. Since gays officially were banned until today, there is no data indicating how many soldiers and sailors are gay. Rank Outsiders, the gay support group, estimates that 5 to 10 percent of the military is gay, reflecting the pattern in the overall population.

Among major U.S. allies, Britain is one of the last nations to eliminate the ban on gays in the military. Canada, Israel, Japan, Australia, New Zealand and the Scandinavian countries do not consider the sexual orientation of their recruits or active-duty military personnel. Finland allows an exemption from mandatory military service for gay men who ask to be excused.

Similarly, most West European armed forces are open to soldiers regardless of sexual orientation. The Netherlands has long followed a liberal policy in dealing with its soldiers, whether the issue is sexual orientation, hair length, labor unions or grievances about working conditions. It also has special programs to help gay soldiers adjust to military life.

Like Finland, Italy often allows gay men exemptions from compulsory service if they say they fear discrimination.

In Greece, gay men and women are banned from becoming officers. If an officer is found to be gay, he or she is forced to resign his or her commission. Gay people who fear discrimination may be excused from compulsory military service.

The policy of the Turkish military, which has NATO's second-largest standing army after the United States, is to expel any member who displays open homosexuality.

Following the European Court of Human Rights ruling on gays in the British military last fall, France and Germany announced that they would tighten regulations to prevent harassment of, or discrimination against, gays in the military.

In most of the world's armies, though, the issue of gay soldiers is muted or nonexistent. The general rule military leaders try to achieve when integrating gays into the service is the one set forth today in Britain's new military code of conduct: "Implementation [of the new policy] should be achieved with a minimum of fuss and disruption to unit life."

Correspondent William Drozdiak in Berlin and special correspondents Amberin Zaman in Ankara, Turkey, and Sarah Delaney in Rome contributed to this report.

CAPTION: British Defense Secretary Geoffrey Hoon confirms the lifting of the ban.