The Ministry of Defence faces a series of huge compensation claims for alleged abuse by troops in Iraq after agreeing a settlement of £2.8 million over the death of a civilian in custody.

Lawyers acting for the father of Baha Musa, a 26-year-old Iraqi hotel receptionist who died after suffering 93 injuries at a detention centre in Basra in 2003, said that the deal would “give confidence” to others to come forward with mistreatment claims.

These include ten Iraqis who were allegedly abused and photographed in humiliating positions by British troops in 2003. They have already launched proceedings for compensation. Four soldiers from the 1st Battalion The Royal Regiment of Fusiliers were convicted of abusing the looters. Lawyers are also preparing claims for nine Iraqis who allege that they were mistreated by British troops at Majar al-Kabir, near al-Amarah, after being taken prisoner following a fierce gun battle. The allegations have been dismissed by the Army.

The family of Mr Musa will take the bulk of the £2.8 million, with the rest going to eight other Iraqis who were detained at the same time. Neither the men’s lawyers nor the MoD would give details of the breakdown. The cost of the settlement will have to be met by the MoD out of the £34 billion defence budget.

The Iraqis were arrested by a patrol of The Queen’s Lancashire Regiment and suffered ill-treatment over 36 hours after being taken to the detention centre for questioning.

Last night Mr Musa’s father, who fought to find out what happened, said: “Nothing will ever compensate for the loss of my son, but at last after five years I feel this dark cloud over our family has now been lifted.”

Daoud Musa was a colonel in the Iraqi police force when his son died. He sought compensation to help to pay for the upbringing of his grand- children. Baha Musa’s death came months after his wife died of a tumour. Colonel Musa is also bringing up his brother’s four children.

Martyn Day, the solicitor involved in negotiating the settlement with the MoD, said that he was satisfied. The mediation process was overseen by Lord Woolf, the former Lord Chief Justice. During the procedure, Lieutenant-General Sir Freddie Viggers, the Adjutant-General who is in charge of army personnel, apologised “for the appalling treatment” suffered at the hands of the British Army.

The five-year battle for compensation followed a number of crucial stages in which the MoD accepted liability. In March it admitted “substantive breaches” of parts of the European Convention on Human Rights.

Colonel Musa, who is expected to return to Iraq next week, accepted that the settlement was fair. During the mediation process he was highly critical that only one soldier, Corporal Donald Payne, of The Queen’s Lancashire Regiment, had been convicted of a charge relating to his son’s death.

Payne, who was dismissed from the Army, pleaded guilty to inhumanely treating prisoners but was acquitted of the manslaughter of Mr Musa. Six other soldiers were acquitted of all charges linked to the case.

Colonel Musa claimed he had been treated shoddily by the Government after it took a month for him to be allowed into Britain so that the mediation could go ahead. A public inquiry is to be held into the circumstances leading to Mr Musa’s death. A judge has yet to be selected, but the inquiry is expected to start in a few months.

Times Recommends

• No apology for Germany’s own Nazi victims
• Intricate web of fear and hope tying down deal
• Victims remembered a year after Mumbai attacks