At least four servicemen were feared dead in the crash, which was followed by clashes between British soldiers from the 20th Armoured Brigade and supporters of the Mahdi army of Moqtada al-Sadr, the radical Shi’ite cleric.

At least four Iraqi militiamen were reported to have been killed. Witnesses spoke of 31 civilians being injured in exchanges of fire as the British forces tried to secure the area around the crash site.

A police captain said an Iraqi child had also died. Two Warrior armoured personnel carriers and a Land Rover were set on fire.

“British troops have come under attack by a variety of weapons, including small arms fire, petrol bombs as well as blast bombs and stone,” said Captain Kelly Goodall, a British spokeswoman.

“A small number of live rounds were returned by British troops in self-defence. A number of [British] personnel received minor injuries.”

A commander of the Iranian-backed Mahdi army claimed one of his men had brought down the helicopter with a Russian-made shoulder-launched missile fired from a building in the northwestern al-Ashaar area of Basra. The helicopter crashed into an empty house half a mile from the governor’s residence in the al-Twesa district.

Contacted by The Sunday Times, Jassan Khalaf, the Mahdi commander, threatened further attacks against the 8,000-strong British force in southern Iraq.

“We’re expecting things to get much worse,” he said. “It was an individual act, not an order, but they [the British] are our enemy.

“We will target their tanks and their troops. We have the right to choose the time and the date. It was a good time today.”

The loss of the helicopter — the first British one brought down by enemy fire since the invasion of Iraq three years ago — prompted scenes of jubilation among followers of al-Sadr.

Iraqi television and Al-Jazeera, the Arab satellite station, showed hundreds of people dancing in the street and hurling stones at British soldiers as a plume of black smoke from the helicopter curled into the sky.

Calm returned by nightfall as the Iraqi authorities imposed a curfew and hundreds of Iraqi police and soldiers patrolled the streets.

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