Ken Hull, 48, died when the three-vehicle convoy was attacked at a junction in the Qiblah district. He was protecting diplomatic staff from the British consulate on a routine journey.

Television pictures showed a blue Toyota Land Cruiser with the doors smashed in and blood splashed across a side window. The other vehicles in the convoy were apparently unscathed.

Karen McLuskie, a spokeswoman for the consulate, said Hull and his colleague — who has not been named — worked for the private security company Control Risks Group.

A spokesman for Hull’s family said “they are absolutely devastated but they would like it to be conveyed that he knew the risk and he enjoyed the job”.

Control Risks said “although everyone who works in Iraq is well aware of the dangers involved it in no way diminishes the sadness we feel for the two men who died today. Along with many others they were engaged in ensuring that the important work of rebuilding the country continues”.

The British Army is investigating the incident. Police said that a second blast five minutes later injured two children who were among onlookers gathering at the scene. Mushtaq Kadim, a local police captain, said the bomb had been planted on a “strategic highway”.

Most of the 8,500 British troops in Iraq are based around Basra, Iraq’s second city, and the consulate there employs about 20 people. Control Risks had previously lost only one of its 500 contractors in Iraq.

After 18 months of relative calm in Basra there are fears that insurgents will increasingly resort to roadside bombs against foreign targets.

The tactic is common in Baghdad and further north and has led to the deaths of many American soldiers.

In Baghdad yesterday a car bomb exploded near the National theatre, killing seven people and injuring 25, including a mother and her two children. Abbas Mohammed Salman, a police major, said three of his colleagues died.

Police also said that the death toll from Friday’s suicide bomb attack on army volunteers in Rabiah, a town near the Syrian border, had risen from 25 to 52 as many of the wounded died overnight.

Speaking from his hospital bed, Rashid Hamed, one of the survivors, described the suicide bomber as “a portly young man carrying a bag in his hand and heading toward us”.

Like many of the victims, Hamed said he was unemployed and desperate for work.

An internet statement posted in the name of Al-Qaeda in Iraq said the group led by Abu Musab al-Zarqawi, the Jordanian terrorist, carried out the attack.

Elsewhere lawyers acting for Saddam Hussein complained that he had been assaulted by an unidentified man during his appearance at a court hearing in Baghdad last Thursday.

In a statement from their office in Amman, the Jordanian capital, they alleged that the man had attacked Saddam and said the two had exchanged blows during the hearing, which was attended by Khalil Dulaimi, his defence lawyer.

“As the president stood to leave the courtroom one of those present attacked him,” the statement said.

Judge Raid Juhi, of the Iraqi Special Tribunal, denied there had been any altercation. He claimed that the hearing had been conducted in a “calm and low-key atmosphere”.

The American military authorities in charge of guarding Saddam also denied that an incident had taken place.

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