Firm rejects Iraq security claims

ArmorGroup described the allegations from Colin Williamson, a former policeman it employed in Basra, as "almost inconceivable".

Mr Williamson, an ex-member of the RUC (Royal Ulster Constabulary) who worked for ArmorGroup in Basra, told the Guardian newspaper the company's "official line" was not to pass on information about militia infiltration of the Iraqi police in Basra.

His claims have been passed to MPs who are calling for a parliamentary inquiry into the company, which is already under pressure after issuing a profits warning last month.

But a spokesman for ArmorGroup said there was no policy stopping staff from passing on tip-offs to the military.

Mr Williamson is quoted in the Guardian as saying he had had an "impeccable" source in the Iraqi police who had given him lifesaving information including about imminent attacks. But he said he was instructed not to pass information from him on to the British forces in the area.

"My role was to go to certain Iraqi police stations daily in the Basra area," he told the newspaper. "But we were told not to report back any intelligence we picked up there, not to hand it to the British military. Why? Because our bosses and probably, in turn, (the Foreign and Commonwealth Office), didn't want to expose how corrupt and infiltrated by the militia the police were."

He added: "I am convinced this man's information saved lives and yet our official line was not to tell the military about any intelligence we came across regarding the police and the militias.

Patrick Toyne Sewell, ArmorGroup's communications director, said: "I can categorically state that is not the case. As far as I'm aware the company has not had an official policy of that type."

He said that former police employed by ArmorGroup to help train and monitor Iraqi security forces worked "very very closely" with the British Army and were often given protection by them. It is almost inconceivable that if they were in the same vehicle being driven around by these guys that they wouldn't have passed information on," he said.