Security officials confirmed this weekend that soldiers from the 3rd Battalion the Yorkshire Regiment are at the centre of a criminal inquiry by the Royal Military Police (RMP) into a “guns for cocaine” network.

Their alleged involvement with organised crime is a fresh blow to the British Army after a week in which a corporal from the Duke of Lancaster’s Regiment admitted he had committed a war crime against an Iraqi civilian.

Although drug use is increasing in the armed forces, this is the first time military police have evidence that stolen weapons are being sold to pay for them.

One of the first soldiers from the Yorkshire Regiment to have been arrested is alleged to have bought drugs by trading handguns, including Glock pistols, smuggled from Iraq to Germany on at least six occasions.

A security source said some of the weapons had been exchanged for about 50 grams of cocaine with a street value of £2,500. The drugs were sold to other British soldiers serving in Iraq.

The source said it was unclear whether the weapons were army issue or seized from Iraqi insurgent groups.

The Ministry of Defence (MoD) fears the soldiers may have been doing business with members of organised crime syndicates in Germany. The battalion has a base near Fallingbostel, north of Hanover.

One security official said: “Who did the guns go to? And what purpose did they want guns for? Did they take them back to the UK and sell them on? Are they in the hands of Yardies?” The case is being overseen by the Army Prosecuting Authority and falls under the jurisdiction of a court martial. The battalion completed a tour of duty in southern Iraq last year and is now based in Warminster, Wiltshire.

As Iraq slides further into chaos, the country has become awash with illicit weapons, many provided to the Iraqi police by America and Britain.

The army is suffering an epidemic of drug abuse. Earlier this year The Sunday Times revealed how the army regiment involved in the first Iraqi prisoner abuse scandal was awash with drugs as the soldiers went to war.

One former fusilier claimed that 75 men from his company, some 60% of its strength, regularly took cocaine, ecstasy or marijuana. “There’s guys who have to have two or three lines of coke before they can operate,” he said.

According to a parliamentary answer, 1,020 army personnel tested positive for drugs last year, including 520 cases using class A drugs — a 50% rise in the past five years.

The MoD confirmed the RMP inquiry but declined to comment further.

Explore UK News

• Crime News

• Education News

• Health News

• Science News

• Scotland News

Times Recommends

• DIY video helps the WI get to grips with sex
• Artists urge nation to save Titians
• Go home, Iraqi leader tells Britain