An SAS soldier on a covert operational mission north of Baghdad was killed, along with one of the aircrewmen taking him on a flight in an RAF Puma helicopter, when two British helicopters collided late on Saturday night.

The mid-air disaster, at about 11pm, occurred when the one of the helicopters flew into the other while they were engaged in the same operation. Both managed to crash land a few miles north of Baghdad in an area controlled by the American military.

The Ministry of Defence said that the two who died, another who was seriously injured and three others who suffered minor injuries were all in the same Puma helicopter. No one was hurt in the second helicopter, also an RAF Puma.

An American combat rescue team in Black Hawk helicopters was the first on the scene. The dead and injured and those who survived unscathed were all picked up and taken to a US military hospital. One of those with minor injuries was later discharged.

Last night an operation was under way to try to retrieve the two Puma helicopters, which had sensitive equipment on board as they were both assigned for special forces operations. Pumas have been in service for about 30 years and are now nearing the end of their service life.

The collision happened southwest of the town of Taji. The MoD said that there was no evidence of any insurgent activity in the crash and that all the signs were that the two Pumas had collided accidently. A full inquiry will be held.

Des Browne, the Defence Secretary, said: “Initial reports indicate that the crash was an accident and was not a result of an attack by insurgents.”

Tony Blair said that it was a “terrible time” for the families of the two dead but he insisted that Britain’s foreign policy in Iraq was “justified and right”.

About 250 British military personnel are in Baghdad, some of whom guard the British Embassy. Others work in the staff headquarters of Lieutenant-General Graeme Lamb, the most senior British officer in Iraq and the deputy multinational commander under General David Petraeus, the overall American commander.

Britain has a significant special forces contingent in Iraq, serving in the south and from Baghdad, with members from the SAS, the Special Boat Service (SBS) and the new support units, the Special Forces Support Group, made up of the 1st Battalion The Parachute Regiment and the Special Reconnaissance Regiment, former covert army surveillance experts from Northern Ireland.

The MoD would not confirm whether the dead soldier was from a special forces unit. However, a spokesman acknowledged that the collision had occurred during an operational patrol. Pumas are known to be used by the SAS in Iraq.

The SAS and RAF work closely in operations in Iraq. The RAF Hercules transport aircraft that was shot down by enemy ground fire in January 2005 west of Baghdad with the loss of all ten on board also had a special forces involvement. One of the dead was an SAS signals expert.

The death of the two in the latest crash brought the number of British deaths in Iraq since 2003 to 142. The next of kin have been informed and the MoD is expected to release the names of the dead today.

In southern Iraq yesterday British troops were again involved in fighting with militia forces, and five gunmen from the so-called Mahdi Army were killed.

On Friday eight members of the Shia militia were killed by British soldiers as they were caught trying to lay mines in the same area where a Warrior armoured vehicle was blown up 12 days ago with the loss of four personnel, two of them women.

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