SMUGGLERS who used to make a tidy fortune for President Saddam Hussein are now offering their dubious services to the British forces occupying their trading posts in Iraq’s southern ports.

Bootleggers changing sides is as good a barometer as any that wary local people are starting to believe that the old regime has gone for good.

Royal Marines and others now in control of this seedy dockside town, from where many of Saddam’s oil pirates operated, hope that everyone else cowering in Umm Qasr will switch their allegiance. While coalition officers may not enjoy doing business with Iraq’s underworld, they recognise that they cannot be too particular about who they must deal with.

One British officer was accosted while on patrol earlier this week by the well-spoken driver of a white Toyota pick-up. As he pulled up the driver asked the officer if he would like to buy a 26in colour television he happened to have acquired that morning. The officer declined but the persistent salesman continued his pitch in flawless English, promising anything the British might require, including whisky which, he said, used to be a lucrative sideline when the Iraqi Army was stationed in Umm Qasr. The salesman, who introduced himself only as Mustapha, boasted that he could cross borders with impunity, although the tanks parked across the desert rat-runs he normally used had played havoc with business.

The arrival of tens of thousands of coalition soldiers was too good an opportunity to pass up. He was desperate to get his hands on a Union Jack to display on his vehicle. At the same time he kept portraits of Saddam and the ruling al-Sabah family of Kuwait in his glove compartment. “Business prudence,” he said.

Mustapha was equally comfortable bartering with a Marine commando as with an Iranian oil trader. He described how he dressed to suit each customer, from sharp suit to traditional Arab dish-dash; for haggling with coalition troops he favoured designer jeans and trainers.

He was reluctant to discuss the money he made during the Saddam years, but amid the shanties in towns such as Umm Qasr there are grand villas which belong to bootleggers, as well as Baath party grandees.

British commanders have said that they intend to make use of local entrepreneurs to kick-start Iraq’s economy, and concede that these may include men who have flouted UN sanctions for years. “Beggars can’t be choosers,” one senior officer said yesterday as he pondered how best to get Umm Qasr’s moribund port up and running again quickly.

“Armies recognise there will be always be profiteers in war, but as long as the only thing these men were guilty of was smuggling then we may have little alternative but to use them.”

Millions of pounds will pass through the hands of local businessmen, and it is inevitable that many of them will have worked closely with Saddam’s henchmen. The Iraqi President needed these sanctions busters to grease the wheels of his illicit economy: they provided the rewards that kept local Baath party loyalists sweet.

The pirates of Umm Qasr made millions of pounds a week for the regime by smuggling oil. The evidence of their handiwork still litters the quayside: precarious piles of junk, car parts and sheets of metal.

Iranian welders who slipped across the Shatt al-Arab waterway were paid £4 a day to build the most extraordinary creations from the drive shafts of saloon cars and engines cannibalised from British-made trains. But as long as they could float and carry oil, that was all that was required.Innocent-looking barges had tanks fitted below decks; some of the bigger craft had six decks and were 200ft long.

The UN estimates that oil smuggling was worth more than £300 million a year to Saddam. The captains would hug the Iraqi coastline from Khor al-Zubayr Bay at the mouth of the Shatt al-Arab, out of sight of British and American warships. There was so much profit to be made that entrepreneurs were prepared to lose one in three of their vessels.

Nobody knows how many crewmen died in these waters, trying to sneak Saddam’s oil past UN monitors. It was loaded onto Iranian vessels and sold to Western oil companies, including those leading the bidding to refurbish Iraq’s refineries and pipelines.

Businessmen such as Mustapha realise that the enormous profits they made under the Saddam regime have gone but look forward to mutually beneficial ties with officers such as Colonel Steve Cox, deputy brigade commander of 3 Commando, who is likely to become the de facto mayor of Umm Qasr.

A British Army spokesman said: “It will be hard for us to tell who worked with the regime and who didn’t. I’m afraid anybody who thrived here had to have links with the previous Government.”

Times Recommends

• Michael Jackson: Not the final chapter
• Indian Army spends10m rupees on golf buggies
• Brüno toned down for 15 rating